As the boom settles on the Australian property market and lending begins leveling out, banks and financial institutions - particularly second-tier banks and credit unions - will be looking to mechanisms to reduce fixed business costs and maximise the efficiency of their operations. Key to this will be to outsource non-core back-office processes such as those related to end-to-end property transactions - a practice that has proven enormously successful with Australia's major banking institutions.

It is well known that big banks have in recent years poured millions into systems, processes and core banking platform upgrades to enable them to rapidly up or down-scale their operations to manage the vagaries of market demand. Smaller institutions on the other hand have not had the processing volumes to make these investments truly worth-while and have continued largely to rely on manual back office processes. The fall-out from this is that as growth slows, these organisations can often be left with fixed costs that are difficult to manage.

However, the good news is that with the proliferation of business process outsourcing (BPO) providers, these financial institutions are well placed to contract out many of their back office operations, enabling them to better manage the ebb and flow of market fluctuations, and better still, to focus their resources on more valuable activities such as customer acquisition and retention, critical in a declining market.

Until recently our BPO product suite has primarily focused on pre-, post and settlement activities such as document assessment, bank check printing, settlement attendance, document scanning and document lodgement. Now after five years of honing, standardising and finessing these activities, we are expanding our services to include core banking functions such as loan verifications, loan draw downs and account openings, in essence providing a more end -to-end banking process.

One of the company's major banking clients is set to be the first recipient of these new offerings.

Co-published article with AB&F Online. 

 

 

They (SAI Global) have removed significant cost and effort from our operations, and at the same time given us more scalability. This has had a positive impact on our customer satisfaction levels and we are very happy with the level of service.

Jodie Alcock

Manager Lending Support, CUA

Key reasons for clients to outsource backroom processes:

• Significantly cheaper than managing things in-house. Over the past five years we have not only fine-tuned our mortgage and settlement service processes, but have integrated our state of the art digital efficiency tools such as Settlement Room into these processes and put considerable effort into training and cross-skilling back-office staff to perform more efficiently.
• Outsource risk. By outsourcing property transactions and other banking activities to organisations like us, financial institutions are in effect, outsourcing a component of their risk and brand reputation and handing over accountability for service delivery to the BPO provider. 
• Allows banks to focus on core activities. For banks, being able to outsource their property transaction and other core processes means they can focus on activities that add value to their customers and enhance customer service.
• Greater scalability. Outsourcing core processing activities provides financial institutions - particularly second tier and credit unions - with the peace of mind that any changes in downstream activities (such as seasonal or marketing-generated peaks) will be effectively managed.  
  There is no doubt financial institutions are changing the way they do business in an increasingly complex market. As we continue to expand services outside core banking functions, we are well positioned to capitalise on the growing demand for BPO services, and in doing so, help financial institutions build trust and confidence with their clients. 

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