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With maturing financial markets world over,
increasing competition, declining margins
and more stringent regulatory stipulations,
the banking and financial services (BFS)
industry is undergoing a transition. Institutions
are restructuring their business processes
to achieve ever-greater operational efficiency.
For most of the larger BFS companies, the
non revenue-generating support functions
have attained the status of an organization
in itself. In the wake of rising cost and
competitive pressures, financial institutions
are questioning the need to maintain huge
back-office establishments and IT support
staff. Moreover, firms are at the risk of
losing focus on their core competence areas,
which can have implications on customer
satisfaction and productivity.
Eager
to focus on the things they do best, companies
have turned to business process outsourcers
for virtually everything else. Reducing
the cost base and focusing on core competencies
are the essential elements of survival in
the financial services sector today. Financial
institutions are therefore considering the
capabilities required in the organization
and how best they can entrust a partner
to provide that capability. There is the
emergence of a new value chain that stands
in sharp contrast to the traditional three
bounded sub-segments:
Banking, Insurance and Securities:-
Apart from the fundamental organizational
transformation, other key trends include:
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Shift from product-centric
to customer-centric strategies |
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Increasing virtualization |
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Reducing margins and increasing
focus on efficiency and cost-cutting
measures |
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Movement from back-office
core banking functionality as a strategic
differentiator to application integration |
The banking and financial services sector
is witnessing a concerted move towards business
process outsourcing as a strategic option.
This industry is ideally suited for outsourcing,
given the large transaction volume, structured
decision making and reliance on rule-set processes.
Outsourcing in this domain has shifted along
the complexity and maturity spectrums from
transaction processing to true business transformation.
Given the increasingly competitive market
place, business process outsourcing offers
tremendous benefits to the financial institutions:
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Cost
reduction |
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Performance
enhancement |
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Ability
to access superior expertise and industry
best practices |
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Devotion
of scarce human resources to core businesses |
“Companies are fed up with managing complicated,
messy things outside their core function,”
says Christine Ferrusi Ross, an analyst with
Forrester Research in Cambridge, Massachusetts.
Your non-core business is our concern:-
Percentage of Financial Institutions Considering outsourcing
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Money Management 24% |
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Brokers 39% |
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Investment Banking 23% |
Core Business
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Investment Banking |
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Advisory Services |
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Asset Management |
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Retail Banking |
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Corporate Funding |
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Institutional Trust Services |
Non-Core Business:-
Financial institutions save on an average
36%, although some firms report savings over
50% after outsourcing their non-core functions.
- Deloitte Research Study June, 2003
Service Offerings:-
Using its proven offshore model, PACIFIC can
help financial service firms in realizing
their outsourcing objectives.
PACIFIC provides a complete suite of
services that include loan and mortgage processing,
equity research for investment banks, IRS
returns processing, reconciliation of trade
settlements and customer service functions.
Tax Processing:-
‘Accounting Today’, a leading business
newspaper for the Tax & Accounting Community,
suggests that CPA firms can benefit by partnering
with a business process outsourcing firm to
provide cost-effective tax solutions. CPA
firms, using PACIFIC's proven expertise, can
turn around a greater number of tax returns
at up to 50 percent lesser cost, without compromising
on quality or control. The relationship not
only improves the workflow/process, by capturing
and storing client tax information in digital
format, but also paves mthe way for elimination
of the need to increase staff during peak
tax processing season.
Reconciliation:-
Most of the banks and financial institutions
have embraced STP (Straight Through Processing)
as the backbone of their operations. This
critical function relies on automation and
multiplicity of systems, software and databases.
A lot of transactions (industry estimates
are around 30%) need manual and expert intervention.
A banker has to perform this reconciliation
process and make sure that there is zero backlog
for the next day’s operations. This reconciliation
process is repetitive, time-sensitive, needs
expertise and has to be performed during the
closure of the markets. This necessitates
a night shift for the workforce. The nature
of this process makes it an ideal choice for
outsourcing. Leveraging the time zone difference
and the global talent pool, some of the best
managed financial institutions have moved
part of these processes to partners.
PACIFIC is equipped, through a proven
combination of people, processes, technology
and domain to help deliver the results. The
initiative can translate to a cost-saving
of at least 40% at the banks’ end without
any reservations on efficiency and service
quality.
Customer Support:-
Given the fact that the financial institutions
have to be accessible to their customers on
a 24x7 basis, providing quality customer support
has become a critical component in maintaining
the trust and reliability in this relationship.
With perceptible increase in client interaction
in recent times, and with the limited scope
of conventional customer service, the financial
institutions are burdened with customer support
issues and spiraling support costs.
At PACIFIC, we address your problems
by delivering dependable customer service
to match your current operations. Additionally,
by implementing customer service ‘best
practices’, we help raise the customerservice
initiatives to greater heights.
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