Just like any other industry, Banking is also influenced by the buzzword – outsourcing. Banking and financial services industry across the globe is witnessing robust growth in past few decades. The growth is mainly due to changing regulatory environment, rapid technological advancements, and heightened competition. These factors force banks to consolidate to achieve economies of scale and scope. This changing landscape in the banking industry is driving banks to explore the outsourcing option to achieve efficiencies.
The concept of outsourcing is as old as the existence of the human community. With the division of labor and specialization of occupation, the core competency has become more narrowly and clearly defined. Further, increase in the complexity of functions necessitated the specialization. In this context, to in-source or outsource is a strategic decision for many 21st century organizations.
Whilst outsourcing confers a lot of benefits, it is not free from risks. For more details, please watch following video: