This increased competition and responsiveness can be attributed in large part to globalisation. The pandemic has awakened a new awareness among businesses of their mutual dependence on one another. The impact on one industry is felt throughout the economy, causing shifts and disruptions in numerous others. Organizations have come to recognize the value of Business Process Outsourcing as a means of maintaining flexibility in the face of such dynamic and interdependent markets (BPO).
Outsourcing Business Processes: a Lifeline for Banks
Years ago, the concept of outsourcing first emerged. It is only relatively recently, however, that banks and other financial companies have begun to use their influence to their advantage. Using this straightforward method, businesses can save money on operations and provide more value to their shareholders and patrons.
The banking industry has been struggling since the global financial crisis of 2007 and has been attempting to make attempts to come back ever since. The sector is being pushed to develop due to discrepancies in regulatory regimes and pressures from the industry. As a result, the call for innovation adoption has risen to the forefront and one answer is outsourcing.
It’s important to note that traditionally, non-strategic tasks like payroll, logistic support, etc. were the ones outsourced. Nonetheless, as more and more businesses adopt cutting-edge technologies, banks, and other financial institutions are increasingly turning to BPOs for mission-critical tasks.
Banks Are Outsourcing Their Core Banking Systems
Many banks are now using BPO which runs call centers to handle customer service for their most fundamental banking services. Here are a few of them:
Retail banking encompasses the bulk of a bank’s day-to-day work because of the extensive client contact required. Banking customer service is increasingly being handled by third-party companies, such as BPO service providers or bank-owned “captive centers,” rather than by the banks themselves. Retail banking encompasses a wide range of services, including but not limited to the following:
- Gaining new customers
- Bills Paid
- Management of client accounts
- Government oversight and regulation
- Management consulting
- Services in risk management and more
Activities Involving Mortgages
There are several notable services that BPO network operators are offering for mortgages:
- Origination Services
- Services provided after a transaction
- Services related to underwriting
Providers of “Reverse Mortgages”
Card-based electronic payments are rapidly replacing cash as the most popular form of payment worldwide. As a consequence, card companies are facing tougher competition than ever before. In this context, offshoring service providers handle several tasks. Examples of such assistance include:
- Responding to card-related questions from customers
- Coming up with Ads
- The safety of information is paramount
- Protection of personal information of customers
- Quickening the pace of business transactions
Outsourcing in the Accounting and Finance Sector
The scope of business process outsourcing (BPO) services provided to a client organization is influenced by several factors, including but not limited to the organization’s size, sector, cooperation objectives, budget, etc. The most fundamental services include setting up an offshore digital accountancy firm, providing additional assistance to the current accounting team, and handling payroll.
BPO in the financial sector can also entail taking good care of accounts receivable and payable, analysis of cash flow, and paycheck accounting. A BPO partner will handle all bookkeeping and tax recordkeeping needs because it is an expert in those areas. It could be useful for comprehensive business planning as well as practical approaches to allocating scarce resources.
The Impact of BPO on the Financial Sector
There are numerous essential concerns for finance and accounting BPO specialists: overall budget, gross income evaluation, the expectation of cash flows, and calculating the business feasibility. The ultimate result of the efficient and timely work of finance professionals is greater profits. In the banking and insurance sectors, BPO can reduce labor costs by as much as 80%. Startup owners reap the benefits of improved productivity and efficiency thanks to their increased ability to concentrate on fundamental business objectives.
The business with accounting and financial experts does provide accountability and data protection. Apart from that, it showcases such attributes as the high quality and precision of their work. The aforementioned effects of BPO—including their timeliness—make it possible for business owners to expand their operations. Contact an experienced outsourcing company even if you are unsure of how to organize BPO in the financial industry. This is the first step towards productive collaboration.
Helping Out Customers
BPO providers, armed with sophisticated tools and solutions, bring a highly qualified attitude to the task of responding to customer inquiries, which is often accomplished through a multi-channel connection strategic approach.
Initiating a New Account
Opening new accounts in bulk, whether manually or automatically, is a cost-effective and time-saving practice. Credit card issuing is just one example of a resource-intensive process that occurs frequently and in large volumes.
Since many BPOs serve a worldwide clientele, they can provide expedited service for even the most time-sensitive tasks, like opening an account, in a single day. The finished product will be waiting in the client’s inbox when they arrive at work the following morning.
Data entry is still required for the many manual methods that must be translated into the organization’s systems. When working on client projects, BPO companies make use of cutting-edge tools thanks to their partnerships with industry giants.
Scanning, Image Processing, and Processing of Documents
Accurate transmission of documentation is crucial because it is a fundamental part of all financial service businesses. Although processing can be done remotely, it is still important that documents be quickly delivered to processing centers via scanning and imaging technologies. When making deliveries from a new location, BPO companies often incorporate a local business. It contributes to its employees’ social security and municipal pension funds.
Services to Businesses
A company that provides financial services is a legal entity that must comply with the laws of the place it is based. It must report financial activity and make tax payments, maintain a safe working environment, and pay its employees at least the legally mandated minimum. All of these functions can be outsourced to a business process outsourcing (BPO) partner or a specialized BPO provider.
Commercial banks, which offer financial services, rely heavily on lending. There is always risk involved when lending money because you might not get it back. When it comes to consumer loans, in particular, it takes a sizable infrastructure to reliably track down and contact a large number of relatively insignificant borrowers to ensure that payments are made on time. Current and former employees rate the company at 4.6 or higher on third-party review sites like Glassdoor, despite the challenging nature of the work involved.
Examination and Settlement of Claims
This service is unique to the insurance industry, but it plays a significant role due to the high volume and high level of discretion required when working with this information. Because a claim only occurs after something terrible has happened, it is taken very seriously. Having providers who are prepared to deal with such claims can relieve the outsourcer of this responsibility. The teams are well-equipped to deal with delicate matters like Collections and Claims processing thanks to rigorous screening processes and a focus on education, intelligence, and emotional intelligence.
Services on a Platform
As more and more businesses become at ease with outsourcing, many service providers are in a position to invest in more advanced infrastructure to handle the enormous volumes they process. In a roundabout way, they can sell this computing power back to their customers. BPO companies are always on the hunt for new ways to provide value to their customers, thanks in large part to the company’s leadership team’s combined 20 years of industry knowledge.
BPO is transforming the financial industry in many ways. By outsourcing non-core functions to specialized providers, financial companies can streamline their operations, reduce costs, and focus on their core competencies. BPO is enabling new and innovative business models that are disrupting traditional financial services, including the rise of fintech companies and the growth of online banking and investing.
The use of BPO is also driving the adoption of new technologies and analytics, such as artificial intelligence and blockchain, which are improving efficiency, reducing risk, and enhancing the customer experience. As the financial industry continues to evolve and face new challenges, BPO is sure to remain a critical tool for companies looking to stay competitive and thrive in a rapidly changing global economy. The future of finance is being shaped by BPO, and the possibilities are endless. Visit P3People’s website to get in touch with BPO professionals to begin your financial service outsourcing journey.