As the global economy navigates its way through the second year of the COVID-19 pandemic, financial services organisations are increasingly on the hunt for ways to increase efficiencies, reduce costs and improve customer experience. From traditional banks, all-new fintechs and big-name insurance agencies to boutique mortgage brokers and financial planners, there has never been a more important time to look outside the box for resourcing and system enhancements, with the fierce competition to attract and retain customers another reason for creative thinking.
Amid such pressures, an increasing number of businesses are looking to offshore destinations, such as the Philippines, for staff to complement their in-house workforces. Before doing the same, here are the key questions you need to ask about outsourcing – and the answers that will set you on the right track.
What is outsourcing and how can it be applied to financial services?
Outsourcing is a smarter resourcing strategy that takes the transactional, time-consuming tasks of an organisation and sends them to third-party team members - in another location. This can easily be applied to the financial services industry as many tasks are repetitive and rule-based, making it an easy transition.
What financial services functions can be outsourced?
A plethora of financial service roles and tasks can be outsourced, with three of the most prominent being:
- Loan packaging and processing
- Loan maintenance
- Valuations, pricing and serviceability
- Database management
- General administration support
- Customer care
- Client retention activities.
- Analysing client needs
- Researching and recommending suitable financial products
- Preparing financial reports
- Invoicing clients
- Updating client records
- Meeting compliance requirements
- Producing SOA and ROA documentation
- Financial modelling
- Insurance quoting.
- Responding to insurance claim enquiries
- Determining coverage
- Establishing and negotiating liability
- Claim lodgement and management
- Liaising with external providers
- Entering and maintaining data
- Investigating and assessing claims
- Administration of documentation
- Managing settlements
- Taking inbound calls/emails and completing outbound calls/emails.
These are just a few of the business financial solutions that can be outsourced, while this eBook shares my first-hand experiences and insights into how outsourcing can make mortgage broking operating models leaner and reduce overheads.
Where can you outsource financial services?
Location, location, location. Whether you decide to set up your outsourced team locally or overseas, the great thing about this cost-saving alternative is it is easily accessible to organisations.
Outsourcing companies and organisations are located all over the world, so choosing the right provider, with the right employees, to match your company values is crucial. Asking the right questions of your potential third-party offshore provider is the first and best way to know you are on the right track. Covering topics such as operations, holidays and leave, security, HR and recruitment, invoicing and management are just a few key points to touch on before taking the big leap into the outsourcing game.
Why outsource financial services to the Philippines?
The Philippines has consistently maintained its position as a leader within the Business Process Outsourcing (BPO) industry, especially within the financial services space. With cloud computing moving to the forefront of focus for CIOs, C-suite executives and board members, cost-saving alternatives such as outsourcing will become more and more achievable and practical for the financial services industry.
Why does the Philippines continue to thrive? Here are 7 reasons you should be outsourcing to the country, but let’s focus on the four that make all the difference in the financial services industry:
- English language proficiency: the Philippines has a Business English Index (BEI) of 7.95, which makes it an ideal destination in understanding financial services terms.
- Quality yet cost-effective: due to the lower cost of living in the Philippines vs Australia, businesses end up saving on costs without jeopardising quality. This is evident in the great business results BPOs in the Philippines have generated in recent years.
- Cultural compatibility: as a result of colonisation, Filipinos have similar values to Australians. In the financial services field, this ensures a sense of professionalism and attention to detail.
- Excellent work ethic: Filipinos value respect and thus enjoy putting in an honest effort to ensure they are part of an organisation’s success. As financial services can be quite technical, they bring a level of liveliness and commitment into the team and tasks they perform.
What are the benefits of outsourcing financial services to the Philippines?
There are four significant benefits organisations receive from outsourcing accounting services to the Philippines:
- Cost-savings: by outsourcing to the Philippines, your employment costs are up to 70% less.
- Expert advice: a BPO guides your business to ensure the decisions you make lead to an increase in productivity and efficiency for your financial services team.
- Business growth: by outsourcing the transactional, time-consuming tasks to your offshore financial services team, you are freeing up time for your onshore staff to focus on tasks that foster organisational growth and drive revenue generation.
- Improved staff satisfaction: just as you free up time for your business to grow, you are freeing up the time for your onshore staff to grow. By relieving them of repetitive tasks, they can focus on what they were hired to do which, in turn, leads to higher employee satisfaction rates.
What does the future look like for the financial services industry?
As seen in our 2021 Financial Services Industry Trend Report, the financial services sector is complex and ever-changing and what tends to accompany business growth is growing costs. Outsourcing in a booming industry such as financial services is just one way that organisations can control these costs without jeopardising the ability to leverage growth opportunities.
Here are a few of the key finance services trends companies are seeing across the sector:
- Remote working: while many mortgage brokers and financial planners have long embraced the remote working model, COVID-19 has accelerated this trend across the broader industry. Large corporations are reassessing their need for office-based staff and consumer-facing shopfronts in favour of a mobile workforce with the capability to meet with clients when and where they require. This, of course, includes adopting technologies such as video conferencing and digital document sharing and signing.
- Product and services changes: financial services providers will need to look at product offerings with fresh eyes following COVID-19. Insurance related to travel and home will need to be radically different in light of not just COVID but environmental emergencies. Meanwhile, customers will become more risk-averse and likely to focus on their retirement and security in an uncertain future. Product documentation will also need to be more robust in light of current conditions, with specific clauses relating to hardship and business interruption.
- Digital transformation: a move by both consumers and businesses to digital is sweeping every industry. From AI chatbots to mobile app-based platforms, the focus is on delivering high quality services when and where customers need them. Being in the cloud is barely worth a mention these days – it is now the norm and inspiring a move towards responsive and personalised products and business finance services. It has also opened the door for fintech companies that can provide the technological capabilities the finance industry needs. The likes of Apple and Amazon may also make a play for market share.
- Recruitment: with business growth within the financial services industry not looking to ease any time soon, many firms are seeking alternative recruitment strategies to help balance the volumes of work they now face. By hiring offshore staff in the Philippines, this problem can be met with a cost-effective solution.
With so much change set to unfold in the next few years, now is the time for financial services organisations to have a solid business plan moving forward. A low-cost alternative such as outsourcing to the Philippines may be what sets your company apart from others and gives you a competitive edge in the market.
To explore further insights into the ever-evolving state of the financial services world, check out our Five Key Post-COVID Trends in Financial Services blog.