Saturday, August 13, 2005

Financial Firms Looking at End-to-End Outsourcing

According to a new study by Datamonitor, a UK-based market research company, there would be changes in the way European financial services companies outsource horizontal business processes, such as HR, finance, accounting and procurement.

Analysts predict that as compared to the previous options when tasks where outsourced on an individual basis, the current trend is towards setting up centralized services and integrated end-to-end functions.

Financial services firms are becoming more motivated to consider this kind of BPO arrangements as complexity increases for tasks such as accounting and procurement, in large part due to the need to comply with new laws and regulations.

Analysts add that the move towards comprehensive horizontal BPO in financial services is also coming about, because vendors are increasingly getting better at providing end-to-end services. BPO vendors have also increased in size and gained a greater range of competencies after the recent wave of mergers and acquisitions. IT services companies, too, are moving into the BPO space through acquisitions.

Procurement is set to become the fastest growing BPO function over the next three years, as it is a good fit for the efficiency drive characteristic of financial services firms.

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