Financial Services Offshoring Trends

Financial institutions around the world are under constant pressure to cut costs while simultaneously increasing revenue. In response, many are shifting business processes to countries like India and China with dramatically lower wage rates. Offshoring is fundamentally changing the way financial institutions do business.

Last year saw a 38 percent increase in the number of financial institutions with offshore operations, along with an estimated 500 percent increase in offshore jobs. Industry executives believe that by 2010 more than 20 percent of the industry’s global cost base will have shifted offshore, with average savings climbing to 37 percent from 32 percent today. Large financial institutions with significant economies of scale tend to be the biggest beneficiaries from offshoring – giving them a significant competitive advantage that goes beyond cost, over their smaller rivals, many of whom remain completely onshore.

More here.