US mortgage BPO mart to touch $1 bn in five years: report

Trinity Business Process Management is a wholly owned subsidiary of Trinity Partners, Inc, provider of technology-enabled outsourcing and IT delivery solutions to financial institutions.

According to their co-authored research report `BPO Opportunities in the US Residential Mortgage Market', the offshore addressable BPO market size for the US residential mortgage ecosystem is $6-$7.4 billion.

The existing mortgage processing BPO market in India is approximately $150 million, employing about 7500. The offshore-based outsourcing is expected to generate cost savings in the range of 30-50per cent along with other long-term strategic benefits.

Avendus Advisors vice-president Pijush Sinha said in the report that BPO providers must continually focus on moving up the process value chain to differentiate themselves.

"Increasing competition in the BPO market is forcing providers to deliver more and more value to their clients each day. To maintain market share and thought leadership, providers must look toward delivering higher value processes for their customers," he said.

According to the report, mortgage players will succeed primarily by partnering with vertically-focused BPO providers that are able to integrate process optimisation and technology enablement with their delivery capabilities.

The cost benefits, according to the report, are derived early. However, the real benefits will come with long term commitment to offshore where the ability to manage capacity, focus on core comeptencies, invest capital for strategic purposes and improve quality and productivity of services will lead to sustainable competitive advantage.

Among the factors driving the offshoring trend in the mortgage ecosystem is the availability of diverse skills and technology advances. This enables most mortgage processes to be delivered from an offshore location.

The report concludes that with companies such as Countrywide Financial, IndyMac Bank, Greenpoint Mortgage and CitiMortgage leading the way, many more players in the US residential mortgage market will look to leverage offshore capabilities in general, sourcing them from India in particular.

Large players add the report are most likely to choose a captive delivery model, the mid-size firms will look to outsource to establish BPO service providers in India specialising in the vertical mortgage domain.