The Renaissance of Loan Processing: Why Outsourcing Is The New Black 

December 19, 2023Lending automation basics

The financial landscape is changing faster than a chameleon on a disco floor. Among these dynamic shifts is the increasing trend of loan processing outsourcing. Many lending businesses are turning away from in-house processing and are outsourcing it to specialists. But what are the underlying factors driving this change, and what does it mean for the industry at large? Let’s dig in. 

The Big Numbers in Loan Outsourcing 

If you’re pondering whether to outsource your loan processing, you’re not alone. According to a recent report, about 37% of financial institutions are considering outsourcing some or all of their lending processes. Moreover, a Deloitte study states that the global outsourcing market is expected to reach $405.6 billion by 2027. 

Here are a few more eye-popping statistics: 

  • 45% Cost Saving: On average, companies that outsource can expect to save about 45% in operational costs according to SourcePointMortgage. 
  • 35% Efficiency Gain: Outsourcing can increase operational efficiency by up to 35% as per Magellan Solutions. 
  • 25% Faster Processing: Loans are processed 25% faster when specialized software is involved, claims Beepo. 
  • 90% Customer Satisfaction: Companies report up to 90% customer satisfaction after adopting outsourced loan processing from Origence. 
  • 30% Compliance Confidence: About 30% of companies claim that outsourcing helps them better comply with industry regulations, according to U.S. Bank. 

“The greatest wealth is a poverty of desires.” – Seneca. Similarly, the path to efficiency is through the outsourcing of redundant processes. 

Smart Loan Origination is The Future 

Technology isn’t merely an enabler; it’s a disruptor. Fintech companies like Turnkey Lender are leading the charge with their smart loan origination systems that simplify, automate, and enhance loan processes. These platforms integrate seamlessly with outsourced services, making the transition almost fluid for organizations that choose to outsource. 

Retail Financing & The Outsourcing Connection 

Interestingly, the retail sector has also started to leverage the benefits of loan processing outsourcing, particularly in the area of point-of-sale financing. By doing so, they are expanding their customer base and maximizing revenues, all while benefiting from reduced overhead costs. 

Best Practices For Loan Processing Outsourcing 

  • Technology Integration: Ensure that the outsourced company’s software integrates with your existing systems. 
  • Compliance and Security: Always check the compliance standards and data security measures of the outsourced firm. 
  • Review SLAs: Review service level agreements (SLAs) to make sure both parties are on the same page. 

To Outsource or Not To Outsource: The Decision is Clear 

The data speaks for itself. Outsourcing loan processing is beneficial for most companies, especially when they use specialized platforms like those offered by Turnkey Lender. Whether it’s for reasons of efficiency, cost, or even just focusing on core competencies, outsourcing seems to be the way forward. 

In conclusion, the transformative potential of loan processing outsourcing shouldn’t be underestimated. It’s not merely a tactical decision but a strategic one that aligns perfectly with the future of digitized, efficient, and customer-centered lending operations.

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