Despite massive challenges, banks have deployed technology and displayed impressive agility to continue to serve customers, maintain productivity and reassure regulators. The rise of FinTech companies is heaping even more pressure on the sector by offering real-time, 24/7 solutions that appeal to many consumers, particularly digitally savvy younger generations. The popularity of online-only or ‘neobanks’ that operate solely online has helped make FinTech one of the fastest-growing industries globally. That growth shows no signs of slowing down. Indeed, PWC has reported 88% of incumbent financial institutions to believe that part of their business will be lost to standalone FinTech companies in the next five years1.
Outsourcing can play a critical role in helping banks achieve the various trends and changes that are shaping the banking and finance industry. By outsourcing certain processes, such as technology and operations, banks can tap into specialized expertise, access the latest technology and systems and improve their operational efficiency. Additionally, outsourcing can provide banks with the flexibility to quickly and cost-effectively respond to changing customer demands and market conditions.
As an example, In the context of core modernization, outsourcing can provide banks with the resources and expertise to modernize their core systems and processes, without having to invest heavily in internal resources. By outsourcing key functions, banks can focus on their core competencies, such as customer engagement, risk management and product innovation. In 2023, outsourcing will continue to be an important strategy for banks to embrace as they navigate the changing landscape of banking and finance and achieve their goals and objectives.
As the pressure builds on banks and financial institutions to reduce costs and drive efficiencies, smart executives are partnering with respected outsourcing providers that have the experience, technologies and workforce talent to deliver results. Valued at $85 billion in 2020, the global BFSI (Banking, Financial Services and Insurance) outsourcing market is projected to reach almost $175 billion by 20282 as more institutions join the almost 80% of retail banks that already outsource at least one part of their business operations3.
There are numerous benefits for outsourcing in the banking industry, including:
Once seen as the domain of contact centers and data entry specialists, many banks and financial services institutions are looking to outsource more complex or technical teams to help boost their capabilities, including:
The need for banking and financial executives to be more agile, innovative and open to new ways of doing business is growing by the day. Learn more about why developing an innovative, cost-effective customer acquisition strategy can help cement your organization as the bank of the future.
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