Business process outsourcing and workflow platforms originally tended to be separate, but it has begun to make more sense to package them together, according to Narayan Bharadwaj, business head for Wipro Gallagher Solutions.
The two services, once only offered separately at the company, are now offered together, he said.
Using outsourced technology to handle something like HARP, for example, makes sense because such a compliance requirement is unlikely to be permanent.
“You just don't invest in something for the next 12-18 months” in terms of technology, especially when “lenders are under increasing pressure to make some money out of this business” as they deal with regulations, said Bharadwaj.
“What we've found, especially in the past couple years, is origination volumes are down” and their revenues do not match up with what are often mounting costs, he said.
This means that in the mortgage industry a confluence of needs for efficiency, compliance and costs tend to drive market participants toward a combination of both technology and outsourcing, said Bharadwaj.
Rather than “‘your mess for less' old-style BPO, lenders are also looking to us as subject matter experts,” he said. This can include applying the company's expertise to replacing a loan origination system and helping to run operations off a platform.
But different market participants have different needs in terms of the extent technology and BPO intersect, Bharadwaj said.
Large banks still tend to keep a more traditional path of keeping their platform in-house and partnering with BPO providers to optimize a process such as post closing, example. These players tend to want to outsource one or two subprocesses rather than a platform that handles several.
But other players, such as small- to medium-sized banks with mortgage lending operations, may find it makes sense to outsource more and run off a BPO provider's data center and use the provider's analysts, for example. This way they are able to avoid costs for things like infrastructure and maintenance costs and convert the type of expenditure into a variable cost model, he said.
When technology and BPO have been combined in the past these have been unit- or license-based on the automation side and—in a situations where analysts are involved, for example—based on number of personnel on the BPO side.
But now Wipro Gallagher is charging in some cases a per-unit price for the BPO and technology combined, said Bharadwaj.
Other ways the company is being competitive include using a combination of local/domestic and international capacities that are well suited to BPO's evolution into a “rightsourcing” model. In other word, clients can choose domestic, cross-border or a combination of both as needed. The international component can ensure time spent processing is maximized given time zone differences, creating effective 24/7 operational capacity, he said.
Also the company, which owns the broad-based consumer finance technology provided by NetOxygen, can help lenders who offer not just mortgages but also products like home equity lines of credit, lines of credit and personal loans, said Bharadwaj.
There has been more interest and willingness to allocate resources to this recently on the part of some banks, he said. Mortgage technology is relatively easy to adapt this way as mortgages are more complex loans and other types are similar. Because of this demand, the company has a commercial mortgage offering under development.
It also has been eyeing subservicing, which has been “a little slow to take off” due to compliance and regulatory issues, but which the company plans to have “ready when the customer needs it.”
