Booming Financial services BPO

The global sub prime crisis will force financial institution to offshore more work to cut cost. Business Process Outsourcing BPO from the financial services sector will increase 40 to 45 times the current market size over the next five years, with key drivers of growth coming from cost pressures and the timely advent of more vertical specific offerings by offshore suppliers, predicts the Everest Research Institute.

Within five years, the Institute projects that the addressable opportunity for global BPO by the financial services sector will reach USD145 to 165 billion for India based services, the hub of global sourcing for financial services. The report also projects offshore BPO adoption in the insurance sector will grow 12 to 15 times during the same time period.

The current financial crisis in the U.S. markets is accelerating interest across stakeholders to understand adoption trends and opportunity areas in offshoring, among other cost containment measures, said Nikhil Rajpal, Vice President, Global Services of Everest Research Institute. Banks and other financial services firms are under significant cost-reduction pressure, which is why a large number of firms plan to reduce headcount in Western geographies and move jobs offshore.

The financial services industry, comprised of banking, capital markets and insurance, is the leading adopter of offshoring services and accounts for 40 to 45 percent of worldwide global sourcing.

As per the study analysis of vertical specific BPO functions, the largest untapped opportunities in banking are specialization in transaction processing, account servicing and credit card fraud management. In the insurance sector, the largest untapped opportunities include policy servicing, customer service, finance and accounting, new business acquisition and claims processing.