Outsourcing Hurts Institutions' Image, Survey Finds

Outsourcing administrative and back office operations to companies abroad could damage a financial institutions' image in the view of its clients and customers, says a survey by International Financial Services District. Over 50% of the nearly 2,000 banking consumers in

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Outsourcing administrative and back-office operations to companies abroad could damage a financial institutions’ image in the view of its clients and customers, says a survey by International Financial Services District.

Over 50% of the nearly 2,000 banking consumers in the UK who responded to the survey said they disapproved of the level of outsourcing occurring in the banking sector, with many saying that moving operations overseas could be enough to drive them to seek business at competitors who keep their administrative operations in-house.

The survey also found that 80% of respondents believe outsourcing damages a firm’s image.

Banks in both the UK and US have increasingly turned their operations over to companies abroad in recent years, hoping to capitalize on cheaper operating costs.

India and other countries provide lower labor costs which have appealed to many banks that have moved their administration and IT operations overseas.

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