Financial services expected to rely more heavily on outsourcing over next two years: study

The financial services sector is likely to see the greatest increase in outsourcing over the next 12 months, driven primarily by cost-cutting efforts, according to a Kilpatrick Stockton LLP study.
The study, Outsourcing Insight, was a joint initiative with mergermarket, and was based on a series of interviews with corporate executives around the world.
It found that among “large-cap” companies, 53% of respondents expect to see the most significant increase in outsourcing.
“The large majority of respondents believe outsourcing will be equally, if not more popular, than other cost-cutting strategies during this period [the next 12 to 24 months], including scaling back production, divesting assets and reducing employee headcount,” a mergermarket release says.
Sixty-nine per cent of respondents reported their experiences with outsourcing as being positive.
“The majority of respondents report that in the past 12 to 24 months, outsourcing rates have become more competitive, service offerings have increased and service quality has improved,” the release continues.
“Outsourcing is not without its challenges, however. These include intellectual property laws, data protection and privacy issues, transparency concerns and contractual problems. The process of managing contracts, as well as the process of selecting and managing a vendor, can also prove uniquely challenging.”