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IS BUSINESS PROCESS OUTSOURCING GOOD FOR AUTO LENDERS?

The defi Team auto loan origination software, Automation, Business Process Outsourcing, defi INSIGHT, Digitalization, Technology

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Auto lenders are always seeking ways to adapt, stay competitive, and reduce expenses. One way to do that is using business process outsourcing (BPO). When the primary goal is to cut costs, gain more free time, and focus on core aspects of the business, it is a desirable option. But is business process outsourcing good for your business?

A recent report from Statista shows that 59% of businesses currently use outsourcing to cut costs—and have been successful. Most auto lenders prioritize cost-cutting as the basis of their decisions, but there is more to BPO.

This article will compare the pros and cons of business process outsourcing for auto lenders and the importance of choosing the right partner.

Is Business Process Outsourcing Good for Your Business: The Pros and Cons

Deciding to outsource is not something to take lightly, especially if you are unsure which provider can help you. Before deciding, it is critical to understand both sides of the BPO argument—the pros and the cons. Business process outsourcing is good for auto lenders, but consider the following criteria while making your decision:

Pros

#1 More Available Resources:

Auto lenders often have limited resources to manage all processes in-house. BPO providers have the technology, staff, and processes to facilitate improved efficiency and workflows that eliminate manual tasks. There is no longer a need to maintain space for employees to handle processes, pay employees to work in those departments, or upgrade your technology when a provider can take over some or all of the responsibilities. Some examples of these available resources can include:

  • Technology and integrated systems that manage accounts receivable with payment processing and accounting systems that ensure real-time updates.
  • Highly trained, multilingual customer support agents that provide white-label customer service. BPO providers can also have staff that is available 24/7 if needed.
  • A dedicated team of professionals focused on shortening turnaround time and maximizing the resale price of off-lease and repossessed vehicles.

#2 Reduced Costs:

In addition to having more available resources, an optimal BPO partner can easily adjust these resources to be increased, decreased, or modified according to lending cycles to maintain set processes and meet compliance regulations. As a result, lenders no longer have to struggle with changing loan or call volumes, reducing overhead expenses and more predictable operational costs.

#3 Scalability:

If your business is rapidly growing, outsourcing allows you to scale your processes quickly without the struggles of trying to expand departments in-house. Consider your provider to be another hand, another voice, another brain available to provide the kind of excellent service that makes for repeat customers.

The amount of loans has increased significantly in recent years, as well as defaults and repossessions. Auto lenders tend to have smaller operations, limiting the ability to handle the increased volume of borrower needs. Choose a partner that not only drives your scalability but does so with professional, white-glove service.

Cons

#1 Shared Control:

As you might expect, outsourcing means sharing control of processes—how tasks are monitored and performed. It is highly recommended that you seek out a trustworthy BPO provider that is entirely transparent. Someone like defi SOLUTIONS, who is dedicated to creating and delivering market-leading services that give lenders access to see how borrowers are performing while improving borrowers’ experiences with shared control of the process.

#2 Hidden Costs:

While most BPO partners will help reduce your overhead expenses, they may surprise you with hidden fees along the way. A contract should define all costs, but unfortunately, not all partners are entirely transparent. If they do include everything, it could be in the fine print of your contract, so read carefully.

Pricing should be one of the first topics of discussion upon consultation. Be wary of providers that give you an “all-or-nothing” price as well. Services should be customizable and tailored to your specific needs. White-label providers give you the option to outsource one, a few, or all processes.

#3 Loss of Focus:

One major disadvantage of outsourcing specific tasks is the risk of misaligned schedules and focus points. It might be challenging to synchronize schedules to ensure you receive what’s promised on a reliable, predetermined timeline.

Many outsourcing providers often serve multiple clients at any given time, and you are not necessarily on the top of their list. As a result, the work you send out may not be receiving the attention it deserves and can be detrimental to your business, especially if you decide to outsource to more than one provider. It is highly recommended that auto lenders choose a single-source BPO

Making the Right Decision

When the decision is made to outsource processes, auto lenders will find that the quality and extent of BPO services significantly outperform anything managed in-house with the right partner. However, you can mitigate the challenges with the right provider, so be mindful of your selection.

Providers such as defi SOLUTIONS focus on the lending industry, offering the essential services and flexibility that can be tailored to your business needs. Benefits such as agility, scalability, reconfigurability, stability, compliance, and innovation can be found in one company.

Getting Started

defi SOLUTIONS partners with auto lenders to improve their processes and services efficiently and at high-quality standards. We act as a white-labeled extension of your business, where you can realize the numerous advantages of our forward-thinking services. If you are still wondering if business process outsourcing is a good idea for your business, contact our team today to learn more or register for a demo.

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