Over the last several years, many of the top mortgage servicing companies (both banks and nonbanks alike) moved some of their customer service operations overseas as part of an effort to cut costs and improve profitability.
But the practice, known as offshoring, proved somewhat problematic for the servicers, as customers frequently complained of issues when dealing with offshore customer service representatives.
Here’s how Fitch Ratings described the issue back in 2014:
“Less experienced offshore staff can lead to ineffective communication with borrowers,” Crowe said. “Even with effective scripting, an offshore call center agent typically does not have the same frame of reference or local knowledge as a U.S. based call center agent. Fitch has found that reliance on scripting works best when calls are predictable and do not deviate from the norm.”
But even with effective scripting, the potential for communication issues is still significant.
Not to mention the regulatory risk that servicers take when using offshore operations, as evidenced by Ocwen Financial being fined last year for using unlicensed offshore operations.
While offshoring has its benefits, one servicer is choosing to listen to its customers and move its customer service operations back onshore.