More than 80% of business through brokers goes to the majors – something this broker-run committee wants to change
“We recognise we need to do more,” says GM of retail broker
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Business is booming for mortgage brokers – which ought to be a positive thing. But with record-low interest rates twinned with government support programs sending demand for home loans through the roof, many brokers face burnout as they struggle to keep up.
One way out of the quagmire is to consider offshoring tasks like admin and data entry, freeing up time to build client relationships and, in many cases, cutting costs.
However, while offshoring means you don’t have to turn away valuable business, it risks becoming a rod for your own back if you dive in unprepared. There are a number of factors brokers should be aware of, says Jane Mason, Product and Channel Manager at BizCover – and different ways they can mitigate any potential downsides.
Jane identifies several risk areas in offshoring work:
- Data security issues. “Operating within the financial sector means your workers may have access to sensitive customer information like bank details, which carries the potential for breaches/fraud”.
- Privacy. Again, when dealing with sensitive client information you need to have the right measures and contractual arrangements in place for collecting, sharing and protecting customer information to avoid any breaches or issues.
- Communication. Offshore workers may not understand your products and services correctly and language barriers could arise. “This may occur with offshoring areas like customer service. These risks can create not only a negative experience for clients, but an opportunity for mistakes to happen when vital information isn’t understood and collected correctly, ultimately damaging your business’ reputation”.
- Competitor risk. The transfer of intellectual property and information to another country may open the door to unwanted competition.
- Political and reputational issues. “Offshoring staff has been a heated topic among economists, politicians and policymakers regarding who benefits from the functions and processes,” says Jane. Political opponents of offshoring say developed countries outsourcing work to countries where the work is performed with lower pay and conditions risk a public relations debacle.
So what steps can brokers take to help ensure offshoring works for, rather than against, them and their clients?
First, approach your offshore hires in the same way you would your local recruitment. “It’s important to conduct the right background and security checks, as you would with local staff, to help to prevent security breaches,” says Jane.
Second, establish service level agreements from the get-go to ensure the quality of service required is clearly understood and can be monitored. This helps offshore staff become accountable for their work and aware of your expectations. However, it’s also down to you to provide proper training, as you would for local staff, to equip offshore employees with the knowledge and tools they need to understand your business.
Last but not least, check your insurance cover. You’ll likely have several policies to protect your business including but not limited to: Professional Indemnity insurance protecting you against losses claimed by a third party due to alleged or actual negligence or errors in your professional services or advice; Public Liability insurance protecting you in the event a customer, supplier or member of the public claims they have sustained an injury or property damage as a result of your negligent business activities; Business Insurance to cover your business contents, stock, tools and commercial premises when an insured event occurs (e.g. fire, storm, theft, accidental damage); and Cyber Liability protecting you from claims and supporting your profitability in the event of a cyber breach or attack.
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