Offshoring in Financial Services: A Detour Along the Automation Highway

Almost one third of the world’s top financial institutions have sent work to facilities in countries other than where the work is currently taking place. These institutions are expected to significantly increase their reliance on offshoring over the next decade, and new institutions are incorporating offshoring into their business plans. In a new report, Offshoring in Financial Services: A Detour Along the Automation Highway, Celent examines what drives offshoring, what types of business processes are being offshored, which countries are preferred destinations, and the potential growth for the industry as a whole. It also discusses the risks faced with offshoring and how firms can prepare themselves to manage them. Finally, the report concludes with a discussion of how offshoring will evolve over the years in response to competition, automation, and consolidation. With a potential 2.3 million jobs in the banking and securities industries currently at risk in the US alone due to offshoring, the financial services industry needs to prepare a more comprehensive strategy to deal with offshoring both now and into the future. Celent estimates a potential to shift US$17.5 billion in operational and technical costs overseas by 2010, only emphasizing the urgency for financial institutions to incorporate offshoring into their service delivery models.