By Audrey B.
Taking into account the global recovery and regulations among financial institutions, many companies have been turning to outsourcing companies, availing themselves of financial outsourcing services such as financial services and finance and accounting outsourcing services, in order to meet regulations, while saving costs and meeting deadlines. Different countries such as Rwanda, Sri Lanka and China, are capitalizing on the trend by ramping up their front and back office solutions for the financial sector.
Asian country, Sri Lanka, announced on the 13th of December that they will be promoting Sri Lanka as a destination for finance business process outsourcing. The initiative will be led by the Chartered Institute for Securities and Investment (CISI) in cooperation with the Sri Lankan Association of Software and Service Companies (SLASSCOM). According to Dinesh Saparamadu, chairman of SLASSCOM, “We see great potential for Sri Lankan IT-BPO companies in the financial services sector.”
China, on the other hand, advised on the 14th of December that Foshan, in Guangdong province, is turning into a veritable hub for financial back office services, after being named as China’s best financial service outsourcing base in 2009. Although primarily focused on the Hong Kong market, given China’s emergence in the field of outsourcing, Foshan is worth noticing.
The Republic of Rwanda, meanwhile, has also seen the potential where the Rwanda Development Board (RDB) has advised on the 22nd of December that they are considering business process outsourcing in ICT with people being trained in ICT in order to promote finance business process outsourcing, as well as training in financial analysis and financial modules.
And while Sri Lanka, China and Rwanda are capitalizing on the trend, Southeast Asian country, the Philippines, who recently overtook India as number one in call center revenues, is foregoing the trend. Although the country has advised that it has been providing call center and business process outsourcing services to the finance sector, the country has advised on the 15th of December that they will be imposing stricter regulations on financial institutions, with the country’s government institutions, the Bangko Sentral ng Pilipinas (NYSE:BSP) and the Department of Labor and Employment (DoLE) crafting new rules to govern outsourcing in the banking industry. Although these regulations may not affect the international outsourcing clime for the country, it would certainly be a blow to local businesses in the country. Gartner (NYSE:IT) however, still sees promise for the country in the finance and accounting sector, according to its latest report, over India and China.
Companies as well, such as Indian company Hexaware Technologies (NSE:HEXAWARE), are banking on finance outsourcing. According to Dow Jones Newswires, the company is looking to acquire a business process outsourcing company in the UK or the US that is working either in the finance or the healthcare sectors.
Banking institutions meanwhile, such as the National Australia Bank (NAB) and Deutsche Bank have turned to outsourcing non-core activities, particularly information technology, to companies such as IBM (NYSE:IBM) and TCS (NSE:TCS) respectively.
The global downturn has affected the economy in more ways than one. As financial institutions struggle to recover from the downturn, countries and companies alike will be sure to capitalize on the opportunity that this presents.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.