Offshoring in the financial services industry
Canadian financial institutions take a more conservative approach to offshoring compared to their global counterparts
Financial services companies are currently capturing less than one-third of the potential cost savings offered by offshoring operations, according to the third annual offshoring study conducted by Deloitte Touche Tohmatsu (DTT). The Global Financial Services Offshoring study surveyed 62 global financial services institutions, including some Canadian organizations.
The study found that high-performing financial institutions offshore 6.7 percent of their global headcount, well ahead of the study average of 3.5 percent. If all surveyed companies that offshore were to reach this “best practice” headcount ratio, they could reduce their collective annual cost base by US$16 billion — more than tripling their current reported savings of US$5 billion.
The study reports that too many financial services companies remain less than fully committed to offshoring for this higher ratio to be achieved. This includes some of the Canadian financial services companies, which have been cautious in their approach. The study concludes that expanding both the scope and scale of offshoring operations is key to realizing these unclaimed savings.
To learn more, read the Global Financial Services Offshoring study.