7 Reasons for Banks to Consider Outsourcing Their Mortgage Services

The success of a bank is determined by its efficiency in managing transactional operations. In this highly competitive industry, banks and financial institutions need to maximize efficiency, expedite loan closings, and minimize recruitment costs. Outsourcing routine and time-consuming mortgage services to a reliable service provider offers a plethora of benefits for financial institutions. This not only enables them to provide premium customer services but also fosters positive outcomes by expediting operations and reducing overhead costs. All financial establishments are facing numerous challenges in coping up with customers and staying afloat of all bank rules and regulations. 

According to research conducted by PWC, the average expense for executing a loan process escalated from $59 to $156 per loan annually between 2008 and 2013. Concurrently, the cost of servicing non-performing loans surged from $482 to $2,357 per loan per year during the same period. Additionally, PWC noted a substantial market share expansion for non-banking services, ranging from 30 to 350 percent between 2001 and 2014.

Financial organizations must seriously consider delivering optimal services to their clients while ensuring profitability. This is where mortgage outsourcing service providers gain attention. Focused on improving the performance of financial businesses, they evaluate and process mortgage data efficiently within a quick turnaround time. With updated knowledge of changing trends and operations, these mortgage outsourcing services boost profit margins with efficient mortgage process practices. With uncompromised assistance offered by mortgage process outsourcing providers, financial firms can now deliver optimum customer services and attract more homebuyers.

Below are the key benefits for banks and other financial institutions when outsourcing their mortgage processes:

1. Minimize Workforce Hiring & Maintenance Hassles:

   Hiring and managing full-time, in-house loan processing teams is a strategically costly and time-consuming procedure. Outsourcing is an option to decrease expenses and benefit from a self-motivated team focused on closing mortgage loans.

2. Trained Professionals with Accumulated Knowledge:

   Outsourcing loan closing processes requires skilled and experienced staff from whom financial institutions can benefit from accumulated expertise. Highly qualified professionals will assist them in originating and funding more house loans, ensuring the security and stability of their enterprise.

3. Faster Loan Processing and Increased Efficiency:

   Outsourcing back-office loan processes will assist mortgage firms and banks in staying stable amidst market challenges. Streamlining operations, mortgage service outsourcing providers ensure efficiency, accuracy, and on-time loan closing, driving prompt customer payments and assuring client banks and firms with a solid reputation and a competitive edge over competitors.

4. Better Focus on Core Competencies:

   Mortgage processes demand highly skilled professionals proficient in the management of excessive tasks, enabling banks to focus on their core competencies. By diverting excessive work to other reliable companies, banks can set their priorities on delivering clients better banking experiences, developing newer credit strategies, and effectively managing compliance risks.

5. Better Leveraging of Analytics & Modeling Results:

   Mortgage services outsourcing providers deliver results from analytics and modeling to guide firms in devising appropriate strategies for the facilitation of their operations. Computing a vast set of customer data will reveal their interactions, behavioral trends, patterns, and associations.

6. Better and Quicker Updating to Newer Technology:

   Irrespective of size or ROI, infrastructure costs can damage any financial institution’s budget. Outsourcing mortgage services enables banks to access high-end technology, as content-heavy mortgage processes demand the same. Thus, with access to the latest digital tools, banks don’t have to worry about costs on upgrading and maintenance.

7. Optimum Customer Satisfaction:

   Mortgage brokers, banks, and lenders can now be tension-free while delivering extensive customer experiences. Mortgage outsourcing service providers assist in getting excellent customer ratings through attentive approaches focused on customer retention and referrals.

In conclusion, outsourcing mortgage services to an external service provider is highly recommended as it enables financial institutions to efficiently manage the same. With highly adept professionals skilled in performing cost-effective loan processing work and access to state-of-the-art technology, banks and finance firms can thrive in this volatile mortgage market. It’s high time for businesses in the banking sector to start outsourcing their mortgage processes and address the challenges more effectively.

OURS GLOBAL’s deep domain expertise and extensively strong mortgage analytics practice support clients in responding to rapidly changing regulations, irrespective of geographical location. Delivering comprehensive end-to-end Business Process Management (BPM) support via scalable channels across the USA, India, and the rest of the world, our Mortgage services cut down costs and improve risk management.