New study says outsourcing becoming key component of lender business strategies |
| With the gradual decline in mortgage lending volume and profits, new research from TowerGroup finds that lenders looking to maintain a long-term competitive position in the marketplace have increased their focus on technology, business process reengineering, and offshoring in order to improve operational efficiency and lower unit costs. Offshoring has moved from being a leading-edge business strategy to being a required activity for lenders that want to grow or maintain their competitive position over the long term.
According to TowerGroup, global sourcing of information technology (IT) services and business process outsourcing (BPO) has become a mainstream strategy in the United States and United Kingdom. TowerGroup estimates that as of December 2005, 15 of the top 20 US mortgage lenders and five of the top 10 UK lenders had captive or BPO offshore operations in India, the Philippines, or elsewhere.
India, well known for its abundant supply of well-trained professionals with degrees in business, computer programming, and engineering, has seen a strong and growing army of trained, experienced staff in mortgage processing, customer service, and back office analytics. A recent
TowerGroup visit to India found that the data centers maintain high security standards and that the quality of IT services and the level of education and training of staff are high as well.
A new TowerGroup report titled, “IT Services and BPO Offshoring to India: From Leading-Edge Strategy to Mainstream Activity,” by Craig Focardi, research director for the Consumer Lending and Bank Cards research service at TowerGroup, reviews the business factors driving US and UK businesses to offshore outsourcing. The research also investigates the people, processes, and security standards that have made India the primary destination for offshoring by financial services institutions.
At TowerGroup, Focardi’s research covers a wide range of process, strategic, and technical topics relating to origination, servicing, securitization and risk management. He also has expertise in business development roles for mortgage technology vendors, lenders and risk management firms.
TowerGroup is a leading advisory research and consulting firm focused on the global financial services industry. Headquartered near Boston in Needham, Massachusetts, and with offices in North America, Europe, and the Asia-Pacific region, TowerGroup serves a global client base. Visit http://www.towergroup.com for more information. |
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