It may not have crossed your mind that even as something as traditional as baking functions can be outsourced to a third party. Indeed, outsourcing has been considered to be a great aid for many businesses not only for its ability to reduce labor costs but also for its ability to provide specialized and high-level services.

It has only been on a recent note that the banking field has finally taken a giant step towards contracting non-core functions towards outsource service providers. It includes relative companies that are found in Asian countries such as the Philippines, China and even India.

The main idea and purpose of outsourcing banking activities was to reduce the amount of people or clients that walks in to their physical branches as well as limiting the number of incoming calls that requires attention from bank executives and concerned staff. There is an urgency to have these needs answered right away. But if there are some other alternatives to load off these functions and have them attended to promptly and with positive results, then the banking institution would have more time on their hands to explore new methods or techniques that would allow to them to keep ahead of their peers. Competitiveness is crucial and most basic banking services may eat up too much time from vital personnel of the company.

In the beginning, this type of relationship among banking institutions and outsource service providers have been controversial and even received negative feedback. In example AMEX availed and opened their doors to BPO services and allowed to handle most of their communication with their clients. It is natural for the latter to feel skeptical and even afraid for their investments. Just imagine having another party gain access to their financial information and provide them with probable solutions. There have been issues as well that have been noted in line with accent and language differences. As a result, there have been delays in services and even unsatisfactory rate from clients. It has pushed several clients to move their banking and financial transactions somewhere else, particularly to banking institutions that do not enforce outsourcing for their activities and various functions.

Moreover, threat to information security has also been noted. This didn’t make a sole impact for the bank clients alone but for the institution itself. It is not easy to maintain information security when vital information are being opened up to BPOs or an offshore third party. There have been reports of security breach which resulted in million dollar lawsuits.  

It is not easy to accept the ideals of outsourcing or BPOs for banking institutions. Even economic and political attributes may affect the type of services that would be provided. If truth be told, there are far more aspects that require attention and improvement in line with outsourcing banking activities. At this point in time, it would best be reserved for services that would include IT services. There are technologies that should be collaborated still in order to meet the demands of this industry.