At the moment, outsourcing in the banking sector is the dominant way of business development. A few years ago, many companies were wondering whether to choose in-house development or outsourcing, but today companies are thinking about how to allocate the resources of contractors in order to get the maximum result.
The number of outsourced tasks is increasing every year. When a bank faces such problems as a decrease in profits, an increase in the number of problematic loans, then such problems are outsourced not only in order to reduce the time for completing tasks and increase productivity but also in order to reduce costs.
It is likely that over time, the number of tasks in banks will only grow. In this case, the decision to keep entire departments dealing with different issues is simply irrational. It is much easier to delegate tasks to companies that understand these issues. You will not need to rack your brains about constantly increasing the number of employees and how to maintain the work of such departments.
According to the latest data, more than 80% of commercial banks already use outsourcing for some types of operations. A few years ago, this percentage was less than 75%.
By delegating part of the tasks to subcontractors, banks save on costs and have the opportunity to develop new services. By choosing this type of activity, banks can deal with their main tasks and brand awareness. Third-party companies take on the issues of developing advertising strategies, creating websites, handling calls, and in rare cases even maintaining financial records. Some banks in America and Germany, have chosen this method, have already cut their costs by 30%.
Danger of risks
In general, outsourcing tasks is an incredibly convenient and profitable practice. However, many executives fear sudden risks.
When it comes to IT processes such as application development, software implementation, and infrastructure assessment, the risks are low. If your company needs high-quality digital transformation, the website https://www.qulix.com/industries/banking-and-financial-software-development/ will provide you with the necessary software development.
The main concern of bank leaders is the issue of crucial bank data leaks. This is information about clients, access to servers, and applications. To this end, the IT services of banks are introducing various means of access control. Logs, 2FA, single entry points.
In order to monitor data breaches, it is necessary to regularly conduct information security audits. Banks can entrust this either to their own department or to a third-party organization that specializes in this matter.
According to statistics, more than 90% of banks that involve outsourcing companies in their work declare that they are content with the work of their partners.
Competition between banks is always present. In order to keep up with progress, you need to keep up with the times. The implementation of the latest technologies will give you a huge advantage and reduce your costs.
Advantages of IT outsourcing for banks
1) Ability to focus on the key points of the work
When you try to control additional processes, you may find that no process works efficiently. By focusing on core tasks, you strengthen the structure of your organization, and you also have the opportunity to develop and implement new services. As a consequence, your organization’s status is enhanced.
2) Continuity of IT department
By entrusting such processes to specialists, your organization does not need to think about how to maintain this department. As a result, you do not have an increase in the cost of services.
3) Third-party analysis of your processes
By using the services of professionals, you can get a third-party assessment of your performance. As the popular saying goes, “no barber shaves so close but another finds work”. We can constantly find flaws in other companies, but in our company, everything seems perfect to us. The opinion of experts will allow you to hear about the disadvantages of your work. Based on this, you can immediately fix problems and improve the quality of your work.
4) Cost reduction
In a pandemic, reducing costs is what everyone worries about. At first, it might seem that there is no difference between who to pay: your own employees or hired specialists. If you delve deeper into this issue, it will become clear that by using outsourcing companies, you also reduce the costs of such things as renting offices, finding and hiring qualified specialists, buying office equipment, and much more. Your expenses can be cut by a third.
Cons of IT outsourcing
1) Facing unreliable partners
Choosing companies with inexperienced specialists can lead to a loss of reputation. It is necessary to reliably verify the quality of the services provided by outsourcing companies.
2) Differing prices of services on the market
Different companies provide different sets of services and technologies. In this regard, it is difficult to understand how not to overpay for outsourcing. In this case, your consultants should analyze each potential outsourcing company and draw up clear terms of reference.
When choosing the path of outsourcing, you should carefully study all the points. Big banks cannot afford oversight. At the current scale and the pace of technology advancement, organizations that rely on themselves are inevitably left behind.
Article by Vishal
Vishal Gaikar is a professional blogger from Pune, India. If you like this post, you can follow him on Twitter.
