The practice of individuals or teams of outside specialists going into a company's premises to perform work there is widely used to reduce the costs of taxes, labour and transport. We are all familiar with the IT model where outsourcers are hired to service
a company's IT department while working inside the company's facilities – it's been happening for decades in private and public sectors in the UK.
Whereas business process outsourcing was seen some years ago as a method which primarily exported work overseas, this is much less the case these days. This is partly fuelled by a growing domestic talent pool, technological advances such as cheaper, more functional
and widely available tools including smartphones, tablets and videoconferencing. These are all equipping and enabling distributed (domestic rather than overseas-based) teams to be highly productive.
A perfect storm has occurred in financial services in recent years - more pressure from transactions and customer queries as people expect 24/7 services via their smartphones, a heightened and evolving regulatory environment, less in-house staff to deal
with issues and legacy technology that has been struggling to keep up. This actually makes insourcing a neat and unique solution.
Financial services institutions are now taking the lead from the telecoms industry and trying to connect better with their customers whilst at the same time dealing with greater audit, compliance and regulatory scrutiny. Many are keen to outsource all of
this in order to deal with volume spikes and pressure on resources, yet, when they suggest this, their risk managers worry about putting out these areas into an outsourced environment. It is often said that to transition this safely and successfully would
take 12 months. Yet we all know, with increasing competition from challenger banks and other pressing factors, it is important to innovate and stay ahead of the game, and to be nimble and quick.
Those risk factors can now be contained and the necessary oversight applied at all times through an insourcing solution. Increasingly in financial services and other sectors, there is now the holistic practice of bringing in resources from outside, managing
and recruiting, delivering training, together with customer intelligence, workforce management, process excellence and consulting capabilities around business transformation. The appeal is that providers of these services can move quickly and at the same time
be very agile. It is a flexible resource clients can deploy to support operational delivery and people requirements, for short and long-term projects, while retaining full oversight, visibility and control. It is a world apart from body-shopping or high street
recruitment agencies providing a company with temps and little else. The specialists drafted in have a real sense of ownership, are part of the team, share common goals and are incentivised to deliver great outcomes for clients.
In these situations, working inside the company alongside their staff, importing a rich knowledge of the global BFSI markets, insourcing teams gain a greater understanding of the issues facing the organisation and deeper insights into the company culture.
This helps them know what will work most effectively and the best channels to use to implement swift and productive change. A comprehensive insourcing offering can effectively manage some of the key challenges faced by in-house operations including: volume
recruitment, attrition and managing call spikes.
Monitoring this approach in UK banking, investment, insurance and pension environments, we have seen 17% higher agent productivity achieved in a call centre, calls reduced by on average 10 seconds a time and an average handle time 2% to 5% lower than before
across all calls. One customer intelligence analytics implementations helped identify a cost saving of £1.5 million for a bank, while another used insourcing recommendations that enabled them to deflect 2,500 calls a day.
Those that try insourcing, tend to like it. Deloitte's 2012 global outsourcing and insourcing survey showed 79 percent of the insourcing respondents were satisfied or extremely satisfied with the outcome, and the rest were neutral. We are seeing insourcing
deliver striking and tangible results for UK financial institutions, so are not at all surprised that all the signs show that the trend looks set to grow.