The dramatic increase in the number of banks that are choosing to outsource non-core activities will result in a better deal for corporate customers, according to Brendan Jones, vice-president of financial services at Unisys.
Banks and building societies are increasingly using third parties to complete mundane, repetitive tasks such as cheque and mortgage processing, signature mandates and life and pensions closed-book operations. "This is good news for corporate customers," Jones told Financial Management. "It allows banks to concentrate on improving customer service while someone else takes care of their back-office operations. Businesses will benefit, because banks will now be keener to tailor services to their needs."
The use of offshore operations, especially in India, has also increased. The low cost of labour there means that the banks can achieve a three-fold reduction in their transaction costs.
"These cost savings are being...