Outsourcing in Retail Banking

Retail banking in India has fast emerged as one of the major drivers of the overall bankingindustry and has witnessed enormous growth in the recent past, moreover competition has made retail banking to focus on creating a distinct customer experience tailored to  the needs of various customer segments.

To trap that varied customer segment, the latest trend that is capturing pace in Indian retailing is BPO outsourcing. Now question for you, Does it make sense for an banking organizations to outsource its IT needs? Most of the CIOs and analysts feel that strategic outsourcing helps an organization to save on cost and speed up delivery while focusing on core business needs. Here in this article we will answer this question in detailed manner.

The first basic thing to know is, given the pressures of a competitive market, banking organizations tend to focus on their core activities — activities that link-up directly with the revenues and hence the profitability. In such a scenario, companies tend to outsource their non-core tasks to focus on business decision-making. And IT infrastructure easily lends itself to outsourcing.

The strategic emphasis of such outsourcing to retail banks prmarily is:

•  Expanding customer base with focus on customer service 
•  Innovating in a commoditized market 
•  Capitalizing on new trends and opportunities
•  Enabling faster production
  

Moreover I found these factors worthwhile to mention as your additoinal and complete knowledge ingradient. To improve understanding of the retail banking BPO market, Understanding the effect that outsourcing/offshoring is having on the retail banking market, Understand retail banking sourcing strategies.

The key trend in the retailing will be content BPO, i.e Interest in BPO services and actual take-up continues to rise in the retail banking sector as pressure on banks for technology-led transformation and operational efficiency continue to mount. This brief looks at retail banking BPO spanning sector specific operations and horizontal functions, highlighting strategic development direction of individual market segments.

Such outsourcing will add tangible value to its clients business processes by leveraging its retail banking domain experience and using proven proprietary technology solutions, with excellent customer service quality and customized training programs with emphasis on customer empathy and process innovation to streamline operations leading to rationalized operating costs and fewer errors and less rework.

After all things said, outsourcing is a strategic business decision that should be made only if a company sees true business benefits accruing from it. Badly-planned outsourcing could result in erosion of service value and cost escalation, but a well-planned outsourcing decision can help you sleep better at night, knowing that the responsibility of deliverables is in safe hands.