Financial services outsourcing has gained more popularity in recent years as more businesses want to cut costs and increase profitability. This kind of business is one of the fastest growing outsourcing destinations in the world. Financial services include all kinds of banking, accounting business process outsourcing and advisory services. In a survey conducted by Frost & Sullivan Research last year, financial services outsourcing was the most chosen industry by global customers.
A lot of organizations that cater to global customers have realized that the best way to achieve maximum client satisfaction is to outsource a wide range of non-core tasks, the survey found. Financial services outsourcing companies offer a wide range of customized solutions, such as customized web and software applications, customized order processing solutions, and customized bill payment solutions. Many financial services outsourcing companies specialize in online banking, travel, insurance, real estate, risk management, and customized communications services. Financial services companies can also provide customized risk solutions, customized compliance solutions, and customized web site design. Financial services outsourcing companies often partner with client companies to create customized solutions, or they may work on a sub-niche with client companies to help them realize financial goals and objectives.
Financial services outsourcing solutions providers can provide an extensive variety of services, according to research by Frost & Sullivan Research. Some of the core tasks that financial services outsourcing solutions providers usually focus on include managing payrolls, data processing, data maintenance, financial marketing, billing, customer service, and payroll administration, according to the research. Some companies even offer financial marketing solutions, which include advertising and managing promotional campaigns. Others manage procurement, production, engineering, and shipping processes. Some companies even help with IT management, information technology, cost management, and accounting. Financial services outsourcing is popular in the United Kingdom, United States, Australia, New Zealand, and Canada.
Outsourcing is a growing trend for companies across all industries, because it allows them to focus on their core business functions rather than concentrating on business operations. Financial service outsourcing also allows for increased productivity, efficiency, quality, and profitability. Outsourcing is not just for large companies anymore. Smaller companies with fewer employees but more entrepreneurial ideas can also benefit from hiring professionals to help maintain and manage their payrolls, finances, and data-management needs.
One of the main advantages of third-party accounting firms is their access to specialized financial tools and software programs. This is especially useful for companies operating in foreign markets, where language and culture barriers might prevent managers from getting their jobs done. Financial services outsourcing also allows an organization to focus on core business activities, rather than being bogged down with mundane administrative tasks. For example, if accounting software doesn’t have a feature that lets you import a new customer purchase order, the manager will spend valuable time searching for that option.
Financial services outsourcing also offers cost reduction in several different ways. For instance, tasks such as accounts receivable collections, electronic funds transfer, and payroll can be contracted out to a cheaper third-party company in order to free up resources in other areas. Cost reduction can also occur through off-site optimization (such as reducing employee travel time and costs for processing paper applications) and more efficient use of office space.