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Mortgage BPO Services A Value-Added Strategic Alternative For Mortgage Lenders

Mortgage BPO Services A Value-Added Strategic Alternative For Mortgage Lenders Richard G. Thornberry President & CEO MBA's 91st Annual Convention & Expo San Francisco, CA October 25, 2004. Strategic Challenges.

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Mortgage BPO Services A Value-Added Strategic Alternative For Mortgage Lenders

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  1. Mortgage BPO Services A Value-Added Strategic Alternative For Mortgage Lenders Richard G. Thornberry President & CEO MBA's 91st Annual Convention & Expo San Francisco, CA October 25, 2004

  2. Strategic Challenges Mortgage lenders will confront significant challenges in the post-refinance environment. • Macroeconomics … industry cycles are challenging • Regulatory Environment … complex and changing • Financial … operating and investment costs are high • Technology … transforming the way business is done • Lack of Scale … impact of mega players • Consumer Expectations … anytime/anywhere

  3. Consolidation of Industry Roles Although some mega players will continue to operate in all capacities, we expect to see industry roles consolidate. Customer Relationship Aggregators (Product Distributors) Product Transaction Platform (Transaction Processing Specialists) Asset Investors (Risk Managers) Bottom line…few can be good at everything.

  4. The Strategic Transition • Joint Ventures • “Offshoring” • “Outsourcing” • “Business Process Outsourcing” (BPO) Beyond the typical … build, buy, exit … strategies, lenders are increasingly considering a broader range of strategic options. Consideration of BPO alternatives is becoming strategically relevant as the urgency to address challenges increases and credible service providers emerge demonstrating early adopter successes.

  5. Potential BPO Value To Mortgage Lenders • Sales expansion … channel, geography, speed-to-market • Cost reduction … absolute, fixed-to-variable • Cost avoidance … eliminate ongoing platform investments • Scale benefits … operational, third parties • Speed to market … improved competitive positioning • Operational improvement … service, conversion, speed, quality • Technology competitiveness … provided by BPO partner • Risk reduction … operating, secondary, HR BPO services offer a value added strategic solution. Benefits gained through a BPO arrangement can enable your organization to focus more on core competencies.

  6. Factors in Selecting a BPO Partner • Experience … mortgage and BPO • Commitment … for the long-term • Non-Threatening … a non-competitor; a non-biased partner • Track Record … references validating performance • Value Added … strategic and financial • Completeness … end-to-end and multi-channel services • Service … client and customer/member alike • Adaptability … products, programs, processes, scalability • Seamless … client experience and transaction • Information … transaction, secondary marketing and performance • Regulatory … proper licensing and compliance processes • Contract … warranties and service level agreements …and most important, select a great business partner that is committed to working with you to build your business.

  7. Value Added Successes of Early BPO Adopters Early adopters are benefiting from BPO programs. • 50% + cost per loan reduction • Customer satisfaction improves to > 95% • Origination volume growth by adding “high quality” direct and web channels • Multi million $ technology cost avoidance/reduction • 60 days to market for new program versus 1-2 year internal development time BPO value is created by leveraging the BPO provider’s expertise while your team focuses on building and developing your “core” strategic differentiators.

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