BPO Potential in Financial Services Sector
BPO : Financial Services Sector Introduction A decade ago British Petroleum faced declining oil production and revenues, but increasing costs in its North Sea oil operations. ... It also required consistent, accurate, and timely financial information executives on whom it could rely on to make rapid and effective resource allocation decisions. ... British Petroleum used business process outsourcing (BPO) to achieve significant cost reduction in its North Sea finance and accounting function. ... Organizations no longer use BPO as a tool to incrementally reduce the costs of back-office transaction processes in the finance and accounting function. Today BPO is a means to achieve a broad range of more strategic goals such as access to new technology and expertise that can transform inefficient processes into state-of-the-art processes, improved decision making based on better financial data and information, and radical cost reductions that can significantly impact the bottom line. “BPO is the long term contracting of non-core business processes to a responsible provider, including support staffing and information technology, to improve business performance and increase shareholder value.” In the past, BPO was limited to back-office operations in Financial Services Provider) FSPs, but more recently BPO providers have expanded their offerings to mid- and front-office offerings. Examples of processes that are candidates for BPO include the following: · Banking — Credit card payment processing, cash management and mortgage origination and lending · Securities — Trade support and settlement, custody and accounting, and mutual fund account servicing · Insurance — Claims processing and policy administration · Common — Payroll, benefits administration and real estate management Potential in the Financial Services Sector The banking and financial services sector is witnessing a concerted move towards business process outsourcing (BPO) as a strategic option. ... Progressive corporations are acknowledging the potential benefits from BPO in this segment and identifying road maps for process reengineering that will contribute to greater profitability. ... Complete Spectrum of Banking and Financial Outsourcing Solutions. Process Spectrum Transaction Processing Accounting Customer Service Credit Underwriting · Application Receipt· Account Opening· Accounting Entry· Data Input· System Operation· Statement Generation· Account Administration· Database Maintenance· Billing & Invoicing· Payment Processing · Payables/Receivables· Research& Reconciliation· Expense Accounting· Journal Accounting· Account Consolidation· CostCenter Accounting· Account Balancing· Accounting Statement· Budgeting/MIS · Inbound Calls· Outbound Calls· Telemarketing· Price Quotes· Query Handling· Complaints · Credit Decisions· Risk Assessment· Scoring Models· Credit Policy· Compliance· Documentation Weighing the Benefits and Challenges of BPO Financial service providers (FSPs) facing an environment of increased competition and an economy that is only slowly mending are seeking IT services that helps them to realize service improvement and cost containment goals. An increasing number of FSPs are choosing business process outsourcing (BPO) to meet these goals, particularly to gain service level improvements. ... Building and delivering on a value proposition that combines improved service levels with strong cost management is critical to ensure the ongoing viability of BPO in the finance sector.