Mumbai: Banknet India, an IT focused banking research consultancy has released a report on BPO in the Financial Sector, at FICCI’s (Federation of Indian Chambers of Commerce and Industry) Global Banking Conference & Exhibition at Oberoi Towers, Mumbai. The report also covers the findings of the “Financial BPO Survey 2003” conducted by Banknet India. Survey participants included 34 Indian & foreign BPO/ITES companies and 14 senior bankers from major public sector & private sector banks in India.

According to Anurag Khanna, MD & CEO of Banknet India, "The Report on BPO in the Financial Sector, which includes White Paper, is the first report of its kind from India & will be of great value to financial Institutions, BPO/ITES companies alike, globally. It will help in understanding the trends, opportunity areas, markets, issues & challenges in the financial BPO sector.”

The salient findings of the survey include:

Outsourcing Benefits: 57% per cent of the bankers cited lower costs as the primary benefit of outsourcing. Focusing on main/core business, improved efficiency & transfer of technology risk were other three leading factors according to the respondents.

Selection Criteria: 72% Bankers feel comfortable with the service providers who have the required domain and technological expertise and experience in the financial sector. Integrity ranks next for 64% of bankers in view of the security and confidentiality issues related to data of the banks. Long-term commitment towards industry, Experience of vendors, Technological expertise & Infrastructure are other important factors in selecting a vendor according to the respondents.

Target Markets: US and Europe (Mainly UK) are the main target geographical markets for BPO/ITES players. For 38% respondents- Australia/New Zealand and for 29% South East Asia including Singapore & Japan are the potential target markets.

Quality Certification: Among the respondents, 50% were ISO certified. Other popular certifications included SIX SIGMA, COPC and SCI CMM. Only 18% of the respondents had no quality certifications. BPO companies regard quality certifications as important requirement to bag major clients.

Future plans of BPO/ITES companies:

Business Growth Vision
To move up the value chain in their respective domains and expand product range to higher value added services.
To offer customized solutions for different industry verticals.
Focus on providing end-to-end customer lifecycle solutions (Across Target, Acquire, Service, Retain, and Grow) to the financial services industry.
Strengthen the End-to-End service offering through a combination of Internal competency development.


Sector Focus
To focus on vertical and domain expertise areas in banking, insurance, transfer agency etc.

Market/ Geographic Expansion

To achieve the right mixture of organic and non-organic growth. To grow operation centers within India across multiple cities and to establish multi- country operations offering country de-risking options, multi- lingual capabilities, and near-shore centers. Planning to set up operating bases in Philippines, Mexico and Malaysia etc. To target new unexplored markets like Asia Pacific, Middle East to reduce their dependencies on western countries.

Customer Relationship
To focus on few but quality relationships, where they can work as 'Preferred Vendor Partners' with their clients.
To build relationships with 7-10 Fortune 500 companies in the next 2 years of operations including large, multi-year contracts with at least 50% customers.
To deal with several large clients in different industries and in different countries. This diversity of the business mix is important for future growth.


Innovative Medium
To maximize benefits to Banks, Financial Institutions and other corporate worldwide by reaching out to them with their products through innovative medium like the ASP / Outsourcing mode in addition to the conventional License mode. The ASP offering would enable the companies to broad-base their target market as well as to provide alternative to their clients.

Strategic Partnerships/ Alliances
To evaluate the possibility of setting up facilities / forging strategic partnerships with Contact Center/ BPO companies outside India.

Human Resource Management
To put in place experienced operations and transition team.
Due to the high attrition rate in the industry, the companies plan to use new innovative ways to retain as well as attract the talent.


Capital
To arrange for additional capital infusion from the new investors. This will enable them to financially strengthen themselves to acquire new business and grow operations.

About Banknet India: Promoted by senior bankers, Banknet India is an IT focused banking research & marketing consultancy with more than 50 clients. Banknet India brings out publications & reports specific to Banking, IT, BPO industry, based on extensive industry research & surveys. Banknet India covers important developments in the financial and IT Industry through its online Banking and Technology portal www.banknetindia.com.

Agencies