Banking BPO and Services

The banking industry has gone through some very rough years, starting back as early as 2007, and it will continue to encounter considerable uphill battles over the unforeseeable future. Many of its challenges resulted from banks’ own actions, regulatory gaps and market pressures, and they were then perpetuated by other world events. Regardless of the drivers, banking will never be what it once was – and that’s not necessarily a bad thing. The bottom line is that the banking industry will evolve in a dramatically different manner.

Those banks that survived and are in the recovery phase will be taking time to evaluate their market positioning, customer segmentation models, product mixes and risk models for each of their businesses. Banking executives are looking for new ideas from their business leaders, analysts, employees and business partners. Senior level leaders who have historically not been open to talking about their challenges and goals are now becoming much more approachable. They are willing to share insights and strategy with those who can help them move their companies back into success positions.

Major banking BPO services mix
Services outsourced in the banking industry mainly cater to the segments like retail banking, mortgages, brokerage, cards and payments, asset management and research and analytics. These functions comprise the core solutions of any bank. Focus on these services will improve a bank’s customer service, hasten the speed to market time and improve its core banking product capabilities.
Five main categories of outsourced core banking solutions:

Retail Banking – This forms the bulk of the core banking services with a high involvement of customer interaction. Popular services include customer acquisition, bill payment, contact center services and account management. The recent financial crisis has brought in a high demand for regulatory control and management services. Risk management services help address strategic issues such as loss forecasting, Basel II readiness, riskbased capital allocation and pricing
Mortgages – The post-economic crisis business environment has significantly changed the mortgage business with the focus on revenue generation while adhering to all governmental regulations. Key services within this domain include origination and closure, and more recently, reverse mortgages. The recent increase in housing demand has driven intensified importance of mortgage-related services such as underwriting
Cards and Payments – Cards have now become the primary payment instrument globally. This has resulted in increased complexity for card businesses. The associated services deal with handling customer card enquires and promotions. Market saturation has resulted in a high degree of cross-selling, while maintaining focus on issues including data security, customer privacy and transaction speed
Asset Management – Banks that handle asset finance operate in a high-growth, high-risk operating environment with significant pressure on interest rate spreads. Services such as fund accounting and capital expenditure are increasingly outsourced to increase the flexibility of and improve customer satisfaction for these financial institutions
Brokerage – Brokerage services such as account setup, maintenance and advisor support, along with portfolio administration, are outsourced to help banks create better customer solutions and realize optimal operating models