The mortgage industry is going through an upheaval, with non-banks taking the lead from traditional banks and the origination volumes eroding. With non-banks becoming leaders in the market, the emphasis on providing a holistic customer experience throughout the life cycle has grown and banks are now trying to enhance their customer experience. All the lenders are faced with eroding profit margins, mainly attributed to falling volumes. The report covers key trends in the industry such as interest rate changes, M&A activities, changing market dynamics with non-banks, and increasing focus on customer experience. Geographies other than the North American region have started showing growth in mortgage activity, especially Continental Europeand the United Kingdom. The United Kingdom, which is the largest geography in terms of mortgage market size after the United States, is covered in detail in the report.
Considering market dynamics, the trends in the market and the new growth geographies, outsourcing trends in the market are covered as well. The current market size, adoption by various dimensions in the deals, and technology inclusion are some of the areas that the report covers from an outsourcing perspective. The report also provides a picture of where the mortgage industry is headed to in the next few years.
Scope of analysis
Coverage across 20+ mortgage BPO service providers including Accenture, Capgemini, Cognizant, Computershare Loan Services, Covius, Digital Risk, DXC Technology, Exela Technologies, EXL, Firstsource, Genpact, HCL Technologies, IBM, Infosys, Sutherland, TCS, Teleperformance, Unisys, Wipro, and WNS.
Content
This report will assist key stakeholders (banks, service providers, and technology providers) understand the dynamics of the mortgage BPO market and help them identify the trends and future outlook. It would help the stakeholders form a better understanding of some of the key trends in the industry and plan their strategic activities accordingly. Some of the findings in this report are:
Q4 2018 saw the highest levels of loss reported per mortgage loan originated
Interest rates are rising gradually with 2018 recording the highest levels in the last eight years
Consolidation in the industry is happening at a fast pace with several M&As observed in the last few years
Non-banks led the U.S. mortgage market with a control of about 51% of the market in 2018
Quicken Loans, the market leader in the United States, was ranked highest in a customer satisfaction study despite offering mortgage loans with rates higher than most of the lenders
The United Kingdom, Germany, France, Canada, and Australia are some of the geographies, besides the United States, showing significant growth in the mortgage industry
The United Kingdom is witnessing a trend similar to the United States, with challenger banks and specialist lenders increasing their market share rapidly
Unlike the United States, the intermediary channel controls about 70% of the loans originated in the United Kingdom
Mortgage BPO has been growing at a steady pace of 6-10%
Servicing, with a growth of about 9-12%, is now being preferred by lenders to boost profitability with higher revenue per loan serviced
As of 2018, more than 50% of the FTEs in mortgage BPO were engaged in servicing-related activities
Small and mid-sized buyers are driving the BPO market with over 50% of the deals being signed by them
Technology inclusion in BPO deals remains 15-20% of the total deals
Shoring mix is moving toward a more balanced approach, with almost 45% of the delivery happening from onshore and nearshore locations in 2018
