We’ve seen many trends come and go in the business world, but some practices become revolutionary and prompt a permanent change. One such practice is outsourcing. Outsourcing is transforming how business is being conducted across many industries especially in Financial Services. It couldn’t be happening at a better time with all the changes that Mortgage Brokers are experiencing as a result of the Royal Commission.
When considering if outsourcing is right for your business, two common questions would be:
- How does outsourcing fit into the financial services industry? And,
- What to outsource and what not to outsource?
Answering the second point is pivotal in ensuring success for any organisation.
Let’s start with the basics: what is outsourcing?
Outsourcing is the practice of hiring a third-party to ‘perform some services or create goods that would traditionally be performed in-house with the company’s own staff and employees ‘. It’s a little like hiring a contractor. We’ve got a more in-depth article about it here.
There’s plenty of reasons to outsource but the most relevant to the financial industry would be cost savings and the resulting more effective use of a Broker’s time. This is the sweet spot, any other reason beyond this is an awesome bonus.
It’s no secret that for any Broker to be successful they’ll need to be able to use their time effectively to do what they do best – provide the best possible service to their clients in a timely manner. However, a lot of the work that goes into organising a loan package is done behind the scenes and it involves a lot of data entry, meticulously checking through loan details and the required documents as well as following up any missing items.
And this is how we can begin to answer the question of ‘what to outsource and what not to outsource?
The best way to answer this question is by looking at what is involved in loan processing? Then we can clearly see what is easy to keep onshore vs. sending to an offshore loan processor. In general, you want to outsource any repetitive process-driven tasks and you want to keep all the revenue building, client-relationship enriching tasks in-house as displayed in the flowchart below.
While this is not an exhaustive list of all the tasks involved with the loan process it covers the 3 Stages of Acquiring a Loan:
- 1. Online Application
- 2. Loan File Packaging
- 3. Settlement and Post-Settlement Activities.
Looking at this chart it becomes pretty obvious where you want to direct your Broker’s skillset and how you can free up their time to do so.
For further discussion on what type of savings you would be looking at when you outsource as well as what the future may hold for Brokers; check out this blog on “The Broker of The Future”