Lowering of interest rates by governments around the world in the wake of the onset of the pandemic led to an increase in demand for mortgages from buyers and provided some relief to borrowers impacted by low demand in the depressed economic conditions. This is not to say that the pall of gloom that had enveloped mortgage lenders lifted completely. Though it was certainly helpful for the demand side issues to have been taken care of, their struggle for profitability continued.
According to a survey conducted by Fannie Mae during the period, changing customer expectations and competition from other sources of lending, along with rising rates, changing market conditions, and a lack of supply of units, were the primary reasons that contributed to the difficult operating conditions faced by
mortgage lenders leading to erosion of margins.
However, as always in a competitive marketplace, every challenge is also an opportunity. As they say, one man’s meat is, or can be, another’s poison.
With physical movement restricted and shelter-in-place and lockdown policies in force in many parts of the world, if there is one clear message the pandemic gave to businesses was that what can be done digitally should be done digitally.
This has given a fillip to the pace of digitization in many industries. If there is a silver lining in the tough market conditions for the mortgage industry, it is that it might have smoothened the decision-making process for digitization, in many companies.
The leadership team of oWorkers, with several decades of hands-on experience in the industry, are known for their swift decision-making. They have guided oWorkers, as well as the projects of many global clients, decisively and capably, during difficult economic conditions.
Benefits of digitization need little recounting
It is probably an anachronistic question considering that digitization, already gathering speed over the last few decades, has picked up even more pace after the pandemic and pushed companies to digitize what can be digitized, but needs to be answered by each company for itself. That is the question of the value digitization will bring to it. It is an investment, after all, and whether it will yield a reasonable return is a fair question for any business to ask before making a commitment.
While each company may need to work out specific numbers for themselves, at the overall industry level, it could be stated that digitization has been found to improve the service provided to customers, create efficiencies in processing and even improve the process of revenue generation through smoother customer acquisition and onboarding processes. The success of fintech companies, driven by cutting-edge software, underscores this point. Consumer surveys also reveal a preference for choosing technology-driven fintech providers over traditional mortgage lenders for similar services.
If you take an even higher global view of the benefits of digitization, it can automate several repetitive tasks, reducing errors present in manual dependence, and even reducing cost through rationalization of manpower as tasks get automated.
Through its partnerships with technology companies, oWorkers has created an access path for itself and its clients to leverage cutting-edge technologies for the delivery of projects and assignments. On account of its spread across providers, a large number of applications can be accessed.
Challenges will always be there
Running a business in a competitive environment is challenging. At no point in time can one sit back, confident that it will now run on its own steam. In a world where everyone is smart, newer technologies, products, and processes are upping the level of the game all the time. Technology is no different. What was good yesterday might be a liability today. You need to constantly keep exploring, evaluating, and implementing.
The digitization journey comes with its own set of challenges. The first step to finding a solution for challenges and addressing them is to recognize them. Once recognized, suitable solutions can be found. In some cases, the result might also be a recognition that the challenge is, indeed, a genuine one, and the associated impact taken into account while working out a cost-benefit of the investment.
The mortgage industry, like other industries, also faces challenges as constituent companies seek to digitize their operations.
What are some of these challenges?
Desire to retain status quo
No change is painless. Starting with the most basic one, it is a human tendency to seek status quo and resist change. Don’t we all know it? On occasion, technology might also seem like a threat, putting livelihoods at risk. There is an apocryphal story about the representative of a bank that has just upgraded its systems, apologizing to a customer for poor service and saying, “What can we do sir? You see, we have just upgraded our systems.” This was the representative’s way of telling the customer that the upgraded systems are useless and he does not support them.
Even clients, used to a certain comfort with an extant method of operation, could have apprehensions and push back. They could also harbor concerns about sharing sensitive information through digital methods.
With its super secure facilities & protocols designed to promote security of data, and ISO certifications (27001:2013 & 9001:2015), oWorkers has created an operating environment designed to quell client concerns regarding the security of information. Adding further comfort is the GDPR compliance of oWorkers.
Customer focus at the expense of employees
A customer is what a business exists for. This is a truism. If there is no customer there is no revenue. Without revenue, there is no existence of a business. Hence, prima facie, a correct position.
The challenge often arises when the customer focus is to the exclusion of the other community on which the functioning of the business depends, the employee. Employees are there in the company for a purpose; they will be carrying out all the various tasks that need to be done to ensure that the company can generate revenues. Companies that ignore the processing side requirements while digitizing could end up creating a deep chasm between what they offer to customers and what their delivery capability actually is. It is important to ensure coordinated and aligned digital development.
Drawing the best resources in each of their delivery locations thanks to their pre-eminent position as leading employers, oWorkers provides training to each employee with the help of an independent training team, including training on the systems. Once ready, they are released into the team handling processing for a particular client, depending on the assessed best fit.
A disconnected digitization strategy
Digital pathways often act as the nervous system of a company and connect the various moving parts together through the flow of information. The implementation of such a system requires vision and a strategy. That is what top leadership is expected to contribute, not the handling of day-to-day transactions. It is also expected to not only provide guidance but communicate across the organization and ensure that there is buy-in and broad consensus on the strategy.
In the absence of a clear strategy and vision articulating the value of digitization to the company, and of buy-in from stakeholders, a fragmented implementation can result, limiting the benefits of digitization and creating resistance against doing more of it. While approving authorities, with bottomline responsibilities, may see the benefit, it is important that others see it too. In the case of large organizations operating in multiple geographies, the issues of local flavors and requirements also need to be adequately addressed so that they can serve the purpose it is intended to.
oWorkers is able to serve its clients in over 20 languages. This has been made possible by its relentless commitment to the creation of a truly global team that is both multinational as well as multicultural. This strategy has yielded an organic dividend in the form of a workforce that is also multilingual.
Change management inadequacy
In large companies, the conceptualization and evaluation of such initiatives are usually done by small, specialized, empowered teams, leaving others to continue to run the business.
At implementation time, however, everyone needs to be involved. Either they need to be trained on new processes, or data conversion is required, or a change in jobs and roles, or something else. Implementation is usually done under the umbrella of a discipline known as ‘change management’ in large companies. It is expected to ensure that the disruption, expected because of a change in systems and processes, is minimized, and all stakeholders, clients, employees, vendors, and regulators, are taken into account and confidence, to the extent they need to be.
With a team and supporting systems that can operate on a 24×7 schedule, oWorkers is able to eliminate the cracks that emerge during any change process, including that of transitioning processes from a client to
its BPO provider.
Solutions usually suggest themselves
In many cases, the process of identifying the challenge itself yields answers to the often vexed issue of how those challenges are to be surmounted. Mortgage lenders ought to have a reasonably clear path and strategy regarding digitization, of course, not accounting for the company-level peculiarities and contradictions that they need to handle in addition.
Communication
Though classified as a ‘soft’ skill, the power of communication can never be exaggerated. And, the larger the company, the greater its relevance. Consistent communication regarding the value the digitization effort will add, encouraging feedback and queries, making an effort to respond to them, and highlighting the role each individual is expected to play, are essential prerequisites. The same, with some exceptions, should be followed for customers as well.
It helps that oWorkers supports clients with the help of employees, and not contractors and freelancers, as some of its competitors do. This enables employees to become steeped in the culture of the company as well as that of the client they support, which comes in handy whenever a digitization effort is underway.
Clear strategy
The strategy needs to define the sections of the value chain that will be addressed by the present effort. Though end-to-end is ideal, it is not always possible, owing to investment constraints as well as complexity and risk. For the sections that are in scope, the processing side of the work should be given as much importance as the customer-facing one. Handoffs between digital and manual need to be clearly defined and managed.
As a pure-play BPO specializing in providing data based services, the strategy of oWorkers is clear and has always been. It helps in avoiding wastage in its interaction with new and prospective clients.
Compliance
Glitches in technology can be costly, as they can lead to large volumes of information being compromised. The security-related aspects of digitization need as much focus as the processing side.
oWorkers pays local and social taxes for its employees and supports their career growth. It regularly gets feedback and scores exceeding 4.6, on a scale of 5, on external platforms like Glassdoor, from existing as well as past employees.
Conclusion
In order to get the benefit of efficiency, cost containment, and efficiently processing high volumes, mortgage lenders are exploring digitization possibilities in their companies. While desirable, the road to digitization can be tricky and winding. They need to make themselves aware of the challenges that lie on this road, and the most effective ways of handling them.
Many global clients have formed successful partnerships with oWorkers, some before their digitization journey, some during it, and some even after. oWorkers brings a tried and trusted project and change management process into play that has contributed to the success of its many engagements, without adding to the price point.
