Outsourcing services are an integral part of various industries due to the heavy repetitive workload and demand for efficient services. Banks and financial institutions face challenges in reducing overhead costs, increasing efficiency, and managing heavy minute operations on a global scale.
Outsourcing facilities are now a remote extension of banking operations. As per a report, around 77% of total retail banking units outsource at least one activity of banking operations.
Outsourcing in Banks: Need for Different Types of Banking
The banking industry involves various aspects such as retail banking, investment banking, international trade, and corporate banking. The need for outsourcing services arises due to the following points:
- Demand for highly efficient services increases workflow along with core business operations
- Shift to high technology and automated services creates a need for outsourcing. Regulatory structures demanding stronger compliances
- Efficient work requirements give rise to the need for outsourcing.
According to a survey report, IT and Business Processing Outsourcing (BPO) helps banks in outsourcing different tasks. BPO is less developed in the banking industry due to the lack of standardized processes. To shift from traditional cash management, loan processing, and bank statement processing, banks are using cloud-based platforms. According to another study, 88% of banks have admitted that they have a strategic plan to collaborate with Fintech companies.
In the banking industry, the following are the key applications that can be outsourced:
Application of Outsourcing in the Banking Sector - How Does ARDEM Step In
Following are some outsourcing requirements of banking outsourcing:
- Outsourcing in Treasury Process: According to a study of PwC and Builder Finleap, a large number of banks are looking for outsourcing services for treasury processes. Banks approach fintech companies for fast processes by collaborating with them.
ARDEM Solution: With the Accounting Services you can focus on increasing accuracy and decreasing cycle times through automation to manage accounting tasks.
- Outsourcing of Transactional Activities: Banks are searching for outsourcing services for financial transactions and settlements, reconciling accounting and financial statements.
ARDEM Solution: Under the Robotic Process Automation Bots can be highly customized based on a specific set of rules in order to ensure consistency. Robots do your legwork for you. All we require is a good project lead and a well-defined business process.
- Loan Management and Process Outsourcing: Loan processing is a time consuming process. Banks and loan institutions are shifting to IT and cloud-based servers for huge loan documents and other processing.
ARDEM Solution: ARDEM has expertise in data capture and data entry with document and form processing. ARDEM provides document scanning services to our Finance and Banking clients and can take these indexed digitized documents and make them easily accessible in a Financial Document Management solution for our clients.
- Outsourcing for Cash Management in banking: Cash management is one of the first processes for outsourcing because fintech and large IT companies have advanced techniques and the ability to quickly manage cash management.
ARDEM Solution: Our Accounting analysts (receivables and payables) have been trained on and have worked in multiple accounting systems. This allows a seamless transition of work to your outsourcing team. Let us handle the process from receipt, approvals, to payments so that your team can transition into more value add tasks.
Risk Framework of Banks
Banks need to focus on these risks not just for compliance and maintaining trust but also in terms of outsourcing which can form a large part of operational risk:
- Strategic risk: To obtain a high level of outsourcing services, the objectives and evaluative measures should be clearly defined. Lack of predefined outsourcing objectives and parameters to evaluate services impose strategic risk for the banking business.
- Operational risk: Improper anticipation and monitoring of risk indicators increase the overall operational risk of units.
- Reputational risk: Banks and any other type of business units outsource some processes to get high-quality and specialized services. The wrong presentation of service proposals and deviation between actual and proposed services can create additional reputational risk on banks and financial institutions.
How ARDEM can help in Outsourcing Services for the Banking and Financial Industry
ADREM offers high-tech solutions in the form of automation and outsourcing. Businesses operating in various industries like healthcare, non-profit organization, logistics and manufacturing, banking, and the financial industry can get high-quality and low-cost outsourcing services with ARDEM.
Banking businesses can improve service quality with the involvement of outsourcing services and ADREM offers a range of services.
Our focus is to improve overall effectiveness with the risk framework for compliance and high-quality services at the least cost.