With increasing plastic money, higher purchase capacity and globally increasing customer base the outsourcing in the Banking, Finance and Accounting sector is not going to take a dip. However, there will be some key market areas that will drive the business. A couple of days ago, I was reading a research report and realized that these predictions were actually very insightful. They predicted the following areas:
The mortgage market is slowly bouncing back. However, the investors as well as buyers are still cautious, focusing on hedge funds before they start refinancing etc. This is only because it’s prudent to play safe, in spite of the obvious spike the market sees. But, one of the major differentiating factors that may restrict the outsourcing of such processes beyond a point is that, the domestic service providers may be able to support some functions like compliances etc. better than an offshore teams.
Risk and Compliance
So far this is an area that was very reluctantly outsourced to destinations like India. But during recession, such operations have almost doubled up. There’s a dearth of both resources and the time needed to implement all regulations. Hence much of such work could be handled very efficiently in the outsourced scenario. However, this is something that will depend upon the consent of regulators and that will decide whether or not this avenue opens up for outsourcing.
Credit Card Business
This is one area in banking and financial services that has expanded drastically over the last few years. The main reason being people’s increasing tendency to use plastic money. Credit cards however are no longer just restricted to the English speaking countries; but are gradually expanding across multiple other countries. So, one of the driving factors in this case will be location-specific service offerings.
Further service providers – who’ll be able to club fraud detection with the routine customer service and other package deals – will have leverage over the others.
As technology develops, lots of older methods of financial interactions and older banking and finance products and services are slowly declining in volume. However, they are still core to the business and might not disappear for a long time to come. This will mean that service providers will have to look into options related to aggregation play, handling multiple clients. This will also mean that if successfully handled, such aggregated offerings will be a long term prospect for the service provider. It will make better business sense for the offshore teams however to also look into the electronic payment scenario to be able to innovate in future.
Mobile banking is another area that’s going to expand by leaps and bounds because financial institutions will now use mobiles as a primary tool to interact with different groups of customers. This means that there will be outsourcing opportunities not just in platform development, but also in analytics and service and support. Regulatory requirements will need to be followed religiously though.
This has long been considered a complex area to be outsourced to BPOs, so this segment will continue to find its place in the KPO segment. However, with a huge increase in experienced and qualified professionals in the area, this might prove to be a potential avenue. Further, clubbed ventures where off shore and onshore teams work in sync will also be looked up to as a very substantial and viable option.
Based on the above, it is clear that outsourcing whether KPO or BPO is yet to offer a lot more than it already has, more so in the financial services domain