Alternatives – The Benefits of Outsourcing & Utilizing Fulfillment Services
Written by: Bill Dolan, CMB, AMP
Sometimes, the best way for banks and credit unions to grow their businesses is by looking outside their institutions. The ever-changing nature of our industry is increasingly influencing lenders to scrutinize and survey the current market trends to adapt their businesses to these trends and achieve sustainable growth.
Each day brings both ups and downs in the housing market, whether in the form of the newest regulatory compliance measures, changing technologies, higher costs, and tighter budgets. It is these factors that prompt many financial institutions to look for solutions to meet the inconsistent demand within the market, and one such solution is outsourcing: which has become a lifeline in the areas of compliance, quality control, Investor accounting, systems administration, secondary marketing, and technology. Many of these functions require meticulous effort and considerable time and outsourcing has become a very attractive widespread demand.
Outsourcing these types of functions and services provides financial institutions with the ability to manage both surges and declines in loan volume. Though it might make sense to establish a skilled in-house lending and servicing team, outsourcing these types of services don’t require a full-time, forty hour per week individual(s) when organizations are looking for ways to reduce their costs and do more with less.
By outsourcing, you create options when your business requires you to scale up or down and if done properly, outsourcing will help you minimize the performance of your staff by making them more efficient and allowing them to focus on their core responsibilities.
In utilizing outsourcing services and external resources, it allows you to immediately reduce labor costs, for without a doubt, labor is the single most significant cost for businesses today. Salaries are constantly increasing, and the weekly paycheck doesn’t include the cost of total compensation such as training, health care, travel, along with other potential perks. Bundle these costs along with infrastructure, compliance, technology, and equipment costs and you begin to see the real costs to your bottom line.
In outsourcing services such as HMDA, Quality Control, Compliance, Investor Accounting, Technology, Systems Administration, Secondary Marketing, you are able to reduce or eliminate many of these fixed expenses to a variable cost. Pay as you go!
In utilizing SCA as your outsourcing partner, our consultants, contractors, and analysts don’t require a desk, or office space, nor do they receive employee benefits. It is therefore far easier to onboard SCA’s workforce as they are typically specialists, hired for these specific roles and purposes. Using SCA provides you with built-in flexibility as you only pay for the work you need. This flexibility helps you to better budget tasks and projects while maintaining financial targets. Most importantly, outsourcing these functions and services allows you to tap into a far greater network and more affordable talent pool.
Turning to SCA allows you to hire experts with years of professional industry experience, who fully understand and can empathize with the challenges both you and your team face, each and every day. Our consultants, contractors, and analysts, sat in the same seats, performed many of those same functions, and learned from some of the same mistakes, to share their knowledge and years of understanding and proficiency, that allows you to be more far more efficient, boosting both your productivity and performance.
Outsourcing can help institutions grow their businesses without breaking their budgets. Take for example areas such as Quality Control or HMDA reporting. Banks and credit unions, especially small to medium size institutions, don’t require a full-time department to perform these functions on a daily full-time basis. However, you still need qualified and competent professionals to help you perform these services, ensuring compliance with your regulators/examiners, as well as with the GSEs in adhering to their guidelines and regulations.
As both a leader and a lender, you’ve created goals and a vision for your company. Your focus should center on whatever it takes to grow your business rather than on administrative and operational tasks. Outsourcing allows you to stay centered on your core business. It can be a real lifeline when your department gets slammed during peak periods and helps you punch above your competitive weight. It also allows you to maintain a smaller core of employees when volume drops off at various cycles. Outsourcing allows you to tap into a higher level of experienced talent to offer more services at a better price than your competitors.
The same holds true with SCA’s pricing model. The more services you require, the more SCA can adapt our bundled pricing to meet your budget.
Remote or on-site outsourcing can pay dividends beyond just getting projects and functions completed. In 2023 SCA managed the day-to-day residential lending facilities for five (5) individual financial institutions alone.
SCA also provides executive coaching for both senior and middle management, as well as establishing training courses for your staff in compliance, lending, and servicing. This is compulsory, if you have a younger or developing team, to allow them to better hone their skills above their primary skill set.
SCA believes that outsourcing is one way of finding the most efficient way to run and operate your business. It is not perfect for every situation but hiring SCA’s consultants, contractors, and analysts will help you address and resolve a wide array of challenges, while keeping your costs under control.
For more information as to just how SCA’s consultative, outsourcing, and fulfillment services have become an integral part of our clients day-to-day business, and how SCA can duplicate these services for you, contact Bill Dolan, Director, at (617) 694-2617 or by email at Wdolan@scapartnering.com. Please visit our Solutions Page to learn more of the products and services we offer the industry today.
