Back-Office Processing

Jonathan Foxx, Ph.D., MBA
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Some lenders get so big that they think there is a need to set up remote processing, otherwise known as back-office processing, or, to put it bluntly, a downsizing ploy the purpose of which is to fire internal staff and hire external staff at a lower cost. I see this happening particularly when margins get compressed and lenders look for ways to cut.

It amazes me still how loyalty is expected by employees but less so by employers. I’ve been told it is a “profit over people issue.” But not really. After all, a competent internal employee can offer the consumer a hands-on experience that is usually not possible to achieve by remote back-office personnel. Catching a few extra mazumah may lead to increasing the bottom line, but it can also cause a chain reaction of decreasing morale, not only in operations but also in the entire loan flow process from point of sale to securitization. In my view, people are not replaceable widgets to be booted out for a few extra kernels of moolah.

There are even back-offices that are remote – in the sense of very, very, very remote, as in off-shore, as in way off-shore in India and elsewhere in the wide world. These entities may have offices in the United States that give the look and feel of a presence in this country, but the real work is done thousands of miles away. ...

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Jonathan Foxx, Ph.D., MBA
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