Mortgage lenders are required to work with several vendor partners considering that loan processing is highly labor-intensive and involves a lot of paperwork. While some companies consider working with mortgage process outsourcing company, the leading players nowadays prefer the Offshore Delivery Centre or the ODC model. An ODC setup offers significantly more value to lenders by providing the benefits of having a capable resource base that is trained specifically on your processes and ready infrastructure apart from other benefits.
Today’s mortgage sensitized ODC models present tremendous convenience to mortgage lenders who can benefit from these setups with a lot less commitment and investment.
We talk through some details about the benefits that ODCs offer over working with mortgage process outsourcing company:
Dedicated Setup and Infrastructure
ODCs is an extended, integrated, and dedicated offshore facility supporting the mortgage lender’s operations. In the mortgage process outsourcing company, the facility may not necessarily be dedicated, which means the mortgage lender will not have control over how tasks are performed and monitored. With a dedicated ODC setup, the lender has complete visibility and control over the processes.
Also, they can be assured that their infrastructure, data, and processes are not shared with any other client. The infrastructure, teams, and processes are built, taking into consideration the unique business requirements of the parent company leading to optimum performance and improved productivity. High availability of resources, trained on your processes, translates to better handling of volume pressures when it truly counts. Research has shown that shared services setups may cause delays 70% of the time, especially when the volumes are unplanned.
The ODC model is designed to be more cost-effective, as compared to simply outsourcing a project. While the initial costs may be a bit higher, the returns are much greater than pureplay outsourcing. In ODC, the objective is clearly to deliver robust solutions that are tailored to best meet the desired business objectives of the parent company. It enables mortgage lenders to better concentrate on their core competencies while the ODC seamlessly supports them with their day to day operations. Research shows that mortgage companies using ODC setups can reduce their annual spends anywhere in the 30-40% range
Since an ODC facility is designed exclusively for a specific mortgage lender, it acts as an extension of the in-house team. The biggest advantage of an in-house team are that you can get what you want done, when you want it and in defined timelines. You have so much more control.
With an ODC, the parent company can demand identical infrastructure in line with its global standards. With ODC teams equipped and aware of processes, they can perform as true extensions of the in-house team. This kind of intrinsic adaptability is a difficult option while working with the mortgage process outsourcing company, considering the nature of the working relationship.
A mortgage sensitized ODC staffs highly qualified professionals who work exclusively for a specific mortgage lender. They understand the company’s requirements, standards, and expectations. This makes communication a lot easier. It also means ODC teams will be more in tune with the policies and culture of the parent company. This is usually difficult to achieve in outsourcing scenarios.
Since the teams are exclusive in ODCs, they can be trained on the policies and culture of the parent company. It is also possible to make choices in leadership and managerial positions to suit the objectives of the parent company. While working with mortgage process outsourcing companies, the mortgage lender may not be able to control team composition, leadership, and managerial positions.
While outsourcing partners may simply deliver to the required deadlines or replicate a defined process, ODCs, on the other hand, can play a key role in innovation initiatives. Traditionally, ODCs were created as organic extensions of the parent company and replicated their exact process. Today, however, they play a key role in innovation efforts. Their close alignment with the parent organization gives them a clear understanding of where the challenges and business priorities lie and focusing innovation efforts on those areas. ODC teams with their multi-discipline skills, domain knowledge, and years of experience, can consistently improve on the process and output.
Of the several companies that have successful ODCs running, several have reported over 10-15% improvement annually, purely based on process innovation and automation initiatives.
Transparency & Governance
Since ODCs act as true extensions, the parent company can decide on work schedules, deadlines. In mortgage process outsourcing situations, lenders will have lesser control over how tasks are performed and monitored.
The ODC setup ensures that schedule, communication, budgets, resource utilization, etc. are managed as per the mortgage lender’s expectations. It is possible to have complete transparency in operations, and you can be sure that the required protocols are followed. Dashboards and reporting help management get a clear view of productivity, processes, and timelines.
While several of these things are possible to do in outsourcing scenarios as well, the control is a lot lesser.
An ODC provides an effective option for mortgage lenders to introduce more agility in their business and deliver long-term value. Visionet’s unique value for mortgage lenders stems from seamlessly combining the leadership, strong domain, and technology into the ODC construct. There are very few companies that can offer this combination within an ODC framework. Visionet has set up and managed ODCs successfully for some of the top mortgage lenders in the US. To discuss more, get in touch with us at firstname.lastname@example.org
Visionet is a leading digital technology solutions provider for the BFSI and Residential Mortgage industry. We are passionate to deliver exceptional business outcomes to our clients leveraging deep industry expertise and proprietary mortgage technology products. We post our views on mortgage technology and industry updates through this blog.