A new report finds that the banking-specific business process outsourcing (BPO) market is poised for significant growth.
At the same time, vendors are realigning — or aware that they must realign services — in order to reflect changing directions in banks’ customer service and business strategies.
The report, which was released Tuesday by NelsonHall, a BPO analyst firm, forecasts that the global core banking BPO market is expected to grow by 45 percent over the next five years, reaching US$6.7 billion by 2011.
It concludes with suggestions to vendors that wish to remain competitive in this sector, such as the ability to manage multiple channels to market and to support the rapid introduction of new products, said Andy Efstathiou, director for NelsonHall’s banking benchmarking and sourcing program and the report’s author.
Mastering the Cross Channel Sale
Cross-channel coordination is a big concern for banks, Efstathiou told CRM Buyer.
“They are trying to manage their presentation to customers across various channels. The traditional banking system platforms,though, are batched-based processing and, thus, very inflexible. The reality is, today’s channels are very flexible,” he added.
Key features that banks will be looking for in a service provider include enhanced business information, a focus on improving high-cost processes, and facilitating partnering, the report found.
Vendors must also provide for a rapid introduction of new products, he added. “The products are not necessarily new but they are constantly being redesigned, such as a different flavor of mortgage. Banks must be able to quickly introduce new types of mortgages and be able to close down the less useful ones.”
Another change is that core banking BPO — once largely localized — is becoming more global for a variety of reasons, according to the report.
Banks in all geographies are realigning the mix of banking products serviced, usually as a result of rapidly changingconsumer demand. Also, more emerging economies are adopting the use of banking services. Here, too, vendors are being forced to adapt.
Other expected changes in the industry include the following:
- An increasing number of de novo, or new, banks, primarily private banks, will be entering the marketplace in all geographies and need to be serviced by third-party providers.
- Risk control (and reduction) is an increasingly important feature of service offerings, as banks expand geographical and confront new regulations.
- Vendors will need to manage rapid scaling of workforce size, while maintaining and increasing worker product knowledge to support both new product introductions and new market entries.