Banking, Financial Services and the Insurance sector (BFSI) companies have been early adopters of offshoring in the services sector. Given the large transaction volume, structured decision making and reliance on the rules–based process metrics, BFSI sector is well suited to leverage the offshoring initiatives. Cost reduction, access to quality talent pool, increased efficiencies through processes, 24x7 service capabilities are some of the key reasons for offshoring. According to our recent analysis, exports in the BFSI vertical from India have been growing at a CAGR of ~29%.

Since the early days, outsourcing in the BFSI segment continues to be the leading outsourcer of IT and BPO services. Outsourcing in this domain has moved from transaction processing to business transformation in the complexity and maturity spectrums. Over the last past few years, this sector has hogged the offshoring limelight for its wide scale outsourcing initiatives across various functions.

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Due to their early successes, financial services offshoring to India has consistently moved up the value chain. Today, many financial services firms offshore most of their middle & back office activities to low cost centers in India, Philippines and South America.

Key structural changes in the financial services industry such as consolidation in the industry, online/offline service expectations, high cost pressures, plummeting profits are creating new opportunities for offshoring. As the industry matures, complex services such as Investment Banking, Research Analytics, Asset Management etc are expected to drive value growth in BFSI Offshoring.