New Dimensions in Outsourcing for Banks

By Debra Masters

Since the 1990s, banks have outsourced expertise for a few non-core product and service functions, such as internal audit, regulatory compliance, and information technology. Outsourcing these services has helped banks address quality issues, leverage resources, manage work flow, and reduce costs. Some banks have additionally relied on outsourced vendors to provide capabilities where they lack internal expertise such-as fiduciary trusts or highly complex products and service.

But today’s market leaders have gone beyond outsourcing merely as a way to lower the cost of processing work flows or to plug a resource gap. Today, the most successful banking organizations are viewing outsourcing as a strategic partnership, which can take the business model in a new direction. These outsourcing services are viewed as a venue for learning industry “best practices” as well as helping identify and mitigate strategic risks.

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