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Keys in financial services outsourcing

The financial services outsourcing sector continues to grow, as more and more businesses are jumping on the outsourcing bandwagon as a means of saving ...

Freddie Pierce
|May 20|magazine6 min read

The financial services outsourcing sector continues to grow, as more and more businesses are jumping on the outsourcing bandwagon as a means of saving money.

But exactly how much money and time are you saving by outsourcing?

Director of Finance Online published a piece today that discussed the true cost of outsourcing financial services, and how the entire process can be improved.

The article argues that while cost saving is still the No. 1 factor in outsourcing, contractual flexibility and professional services integration are also becoming more important to the financial services outsourcing industry.

The piece cites that many banks and insurance companies have been taking advantage of financial services outsourcing, saying that banking giant Barclays announced in 2009 that they would cut almost 2,000 technological jobs to Singapore, India and Hungary.

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Outsourcing jobs like financial services allows companies to focus more on their core business, which in most cases can be a very good thing. Adding to the need to outsource is the fact that it has become much more difficult for banks and other financial businesses to manage their IT units entirely in-house.

According to recent reports, IT is the process most commonly outsourced by financial service institutions, followed by call centers and human resources. Being able to react quickly to a changing IT world is becoming something of a competitive advantage, and outsourcing companies are better equipped to take advantage of that in the financial services realm.

Also, with tightening banking regulations, financial service industries need the extra time and resources available so they can focus on their core business, lest they fall behind in what they’re supposed to do best.

Outsourcing in the financial service field helps banks, insurance companies and others involved stay ahead of what they do. So the next time you think that outsourcing is all about saving money, think again.