I recently conducted a survey on LinkedIn of Mortgage Brokers in my network because I wanted to find out what the general sentiment is in the broker -world about the outcomes of the royal commission and the possible impacts it may have on broker businesses. The large majority of the brokers I surveyed raised concerns around the future uncertainty of their business environment. This concern is a result of a number of factors, including the possible changes to the broker remuneration model and banks tightening up their lending requirements.
One solution is outsourcing
We all know the task of processing a loan is admin heavy; especially in the current environment. It takes brokers away from attracting new business, but at the same time, hiring someone else to do it comes with its own risks as well i.e. ensuring you have a large enough pipeline to feed the loan processor new deals.
Outsourcing your loan processing tasks to an external organisation can assist with these problems and provide your business with a tool that will help it grow throughout these uncertain times; while also mitigating financial risk.
When outsourcing tasks to a third party provider you reap the benefits of having a well trained specialist working for your business and, typically, you only pay for what you use. This is in contrast to hiring someone internally in your business who may require significant training and also must be paid regardless of how much work they have to do. When using an outsourced loan processing provider you can dial up and down the number of resources you require in your business with a simple phone call and sometimes without any notice at all.
This level of resourcing flexibility provides you with the opportunity to grow your broker business without the long term commitment of hiring staff internally and the other costs associated with that e.g. increasing office space to accommodate new staff, paying for computers, office furniture, internet connections etc. Outsourcing provides you with the ability to scale your loan processing capability inline with your ability to increase sales (which is arguably your core business as a broker).
Loan processing is only the tip of the iceberg when it comes to outsourcing. There are hundreds of organisations out there that you can outsource your marketing, accounts, sales admin, and broker support tasks to as well. The aim is to build a flexible business model that can adapt to the changing environment while mitigating financial risk at the same time.
In light of the changing business environment and a future of uncertainty how much are you putting at risk by remaining the same?
If you have any concerns, start by speaking to an outsourcing provider to get all of the right information. Click here to read our helpful eBook that answers 33 of the most common questions mortgage brokers interested in outsourcing should ask any prospective supplier.