When considering outsourcing by a bank, a common question may arise as to which activities should be outsourced and which tasks should be performed in-house. 

Badly-planned outsourcing could result in erosion of service value and cost escalation. On the other hand, a well-planned outsourcing decision can help bank management to sleep better at night, knowing that the responsibility of deliverables is in safe hands.

Generally, banks divide their activities into core and non-core activities. Core activities being central to their strategy cannot be outsourced whereas the non-core activities can be outsourced. Banks generally use outsourcing decision matrix for effective outsourcing decision.

For more details, please watch following video:

Outsourcing Decision in Banking, LDM Risk Management

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