Almost a fifth of all financial institutions, and over 44% of banks, outsource business processes outside of the UK, according to research commissioned by eFunds International.
Sixty-eight per cent of companies interviewed by independent research company, Metrica, said they outsourced their business processes outside the UK to gain costs savings. This figure was followed by 42% for greater efficiency plus better time management and 32% to enable them to concentrate on core activities.
The research reveals that an increasingly popular location for outsourcing is India with 16% marketshare. Four out of five respondents agreed that local staff are very cost effective and that India has a large and well educated graduate workforce, many of whom have the necessary skills for IT and business processes. Only 20% expressed reservations over language and cultural difficulties.
Ron Drake, managing director, EMEA, eFunds International, says: "The e-revolution is constantly shrinking the world, cutting out geographies and time zones easily."
"We believe that the continued outsourcing expansion will be in the financial applications market in the next two years although other areas like customer service will become more important and companies will re-deploy these processes to countries like India to great advantage," he adds.