A comprehensive guide to financial services outsourcing

Financial Services outsourcing has grown over the years as financial institutions are willing to jeopardize to an extent that around 55% of the overall global BPO market is comprised of servicing banking, financial services, and insurance (BFSI) clients.

Outsourcing from service providers allows banks and financial institutions to reduce costs because of better turnaround time and post-project continuity. Banks are more interested in taking advantage of the outsourcing approach simply to cut costs and tap into broader industry experience, insight, and expertise. An outsourcing service provider can deliver quick quality results which allow them peace of mind and they can focus more on core banking activities.

How financial service outsourcing helps brands in the BFSI industry

Outsourcing financial services provide a more flexible approach in a larger landscape. It gives better time-to-market, access to modern technologies, a skilled workforce, and most importantly, is less expensive. Let’s discuss why you may need financial service outsourcing if you are in the BFSI industry.

Save your time

Investing a lot of time in back-office activities, lead generation, and customer experience is not a good choice for your business. Therefore, outsourcing these important tasks to a service provider can help you save time. The expert outsourcing provider efficiently handles this non-core still imperative business operations so that you can put more time and energy into other core banking activities.

Access to modern technology, experience, and expertise

With outsourcing financial services, you are exposed to professional expertise that is better aware of the current technologies in the market and has a skilled workforce.

Once you have your business outsourced, your outsourcing partner will take care of all the technology upgrades and keep your business up to date with modern trends, policies, and regulations. Also, you will have the advantage of an expert and an experienced workforce who will look after all your needs and fulfill them on time.

Cost-effectiveness

This is the most desirable benefit for all the businesses out there that are eventually competing to be profitable at the end of the day. Outsourcing your financial services is cost-effective than employing in-house staff to handle customer support, back-office, and generating sales for your business. With outsourcing, you can also get rid of the overhead costs of hiring that an agent would generate, such as PF, health insurance, retirement, etc.

Focusing on core banking activities

Businesses often spend too much energy, time, and resources on non-core activities. An outsourcing provider is skilled and experienced enough in taking the pressure off your shoulder. Outsourcing financial services accelerate growth whilst delivering quality service more effectively.

Commonly outsourced financial services

Lead Generation

If you don’t have the resources to hire a full-time in house department, outsourcing it to a dedicated skilled team is the way to go. Outsourcing such services can provide a better turnaround time on identifying, prospecting qualified leads, and scheduling meetings with clients.

Payroll Processing

As a business owner, you have to run the business, as a priority and not process payroll for your employees. To process payrolls, you cannot miss out on core banking activities. You don’t need to get into this complex task, and you can simply outsource it to a third party and save a world of time, energy, and money.

Customer Support

Customer support in banking is one of the most crucial activities. Especially in banking, customers can be skeptical as they keep their hard-earned money with them. Guiding them right to achieve their financial services on time is an important aspect of a bank to’s success. Outsourcing your customer support in a country like India can continually carry out the responsibility at a very affordable price.

Back office outsourcing

Outsourcing back office as a strategy is time-tested and most sought, across industries. Sometimes, banks can be caught up with pure service banking activities, and CRM and data management might take a backseat. Both of these are quite important things to ensure focus and transparency in all financial firms. Outsourcing partners can do it for you with ease given they have the relevant experience and expertise that you require for your business needs.

Challenges and how to overcome them

There are a couple of challenges to finance outsourcing that companies need to keep in mind before choosing any outsourcing provider. Having said that, the good news is that there are also antidotes to these challenges.

Cultural Differences

When you decide to outsource financial services, you will be working to work with a staff that hails from different countries and different cultures. This may lead to employees having a lot of misunderstandings when they work together. Make sure that your outsourced employees get along with your company culture to overcome this challenge. Fun activities, mailers, and rewards can go a long way for communication to find a bridge for itself.

Reduced control

Your outsourced employees will not be under your direct control or feel influenced all the time, unlike your in-house employees. In order to make sure that you possess some authority, provide updates at regular intervals, and stay connected with the employees. An outsourcing provider should keep the channels of communication always open.

Want to outsource financial services in India?

Lately, India is setting itself up to be a center of financial services outsourcing hub for the developed nations. In an effort to bring effectiveness and ease into your financial operations for your customers, you can outsource financial services to India by going beyond your physical boundaries.

Excellent turnaround time

India carries years of experience in the outsourcing industry. Therefore, the outsourcing firms are very professional and work with well-trained agents to deliver quality service within the given time frame.

Cost savvy

Businesses prefer to outsource their business to Indian outsourcing providers which provide them with a dedicated workforce. The workforce is not just flexible but also reduces regular expenditures, technology, and maintenance costs over a period of time.

Access to the latest technology and infrastructure

Financial services require dedicated technology and infrastructure. Lately, India has seen an enormous improvement in connectivity, power, and other business infrastructure. India offers the latest technology at affordable prices compared to other outsourcing destinations.

Things to look out for while outsourcing financial services

Once you have the list of outsourcing partners in your hands as a business operating in a financial services landscape, you can assess each partner based on the benefits they offer.

Quality resources

The businesses will need to look at the skill set of the outsourcing business and determine if they will gain access to better talent and superior technology by outsourcing rather than going for their in-house team.

The scale of operations

Some businesses go for large service providers believing that their scale and customer experience will offer them a better quality of services. However, businesses might also get ignored by financial outsourcing giants and might prefer a small firm that gives them more attention.

Security

Banks usually hesitate to outsource their financial services because of security reasons. The outsourcing partners carry customers’ personal information and bank account details. There is always a risk of a security breach.

You can easily escape this risk by keeping the following checklist in your mind:

• Check the references, and history, and ensure that the outsourcing partner meets all the basic security standards.
• Consider the encryption method used by outsourcing partners on their websites.
• Observe the actions they take to monitor location and data.

Stability and Continuity

Any business looking forward to outsourcing services should have a sense of faith in their service partner when it comes to stability and ownership. They also want a surety about having a single point of contact for the entire duration of the contract for effective communication.

Besides the above-mentioned points, every business should prepare its own set of questions according to their business needs that they want their outsourcing partners to answer. With the growth of services in the finance and accounting outsourcing industry, there are plenty of business needs, you may want to think upon to outsource. Businesses can take their time in selecting the right outsourcing firm so that they can have a long and productive affiliation.