Europe

Changes in financial services offshoring trends

Although India, China and Ireland are the top rated offshore destinations for financial services companies, Brazil, Poland and the Philippines are predicted to also be key centres in the next few years, according to a survey on offshoring in the European financial services sector carried out by PricewaterhouseCoopers financial services group and the Economist Intelligence Unit. The results of the survey will be formally released in September. The survey is based on interviews with 156 senior executives based at banks, asset managers and insurers. Current offshoring activity in the financial services sector is the tip of the iceberg – 36% of those surveyed currently have over 10% of their headcount offshore. In 3 years time over 64% expect over 10% of their headcount to be based in offshore centres. So called ‘highervalue’ activities such as knowledge-based activities (e.g. financial research and modelling and customer contact activities involving inbound enquiries as opposed to scripted sales calls) will increasingly move offshore over the next three years. Cost saving objectives fuel almost 80% of offshoring projects and improved quality of service and the ability to focus on core competencies are also significant drivers. “There is little doubt that offshoring presents financial organisations with an important tool to gain competitive advantage. Many of the long-term gains from offshoring come from smarter ways of doing things, from improved processes and from knitting together a number of offshore centres, some in low-cost countries and others in high-cost ones, into single, cohesive activities. Those who get most out of offshoring are likely to be those who put most into planning at the outset and who look beyond the initial cost savings and towards leveraging a global talent base,” the report said.