HP Enterprise Services released the key findings from a European […]
HP Enterprise Services released the key findings from a European study designed to elicit executive insights into key business issues in the European retail banking sector. The survey specifically explored the need for change in operating models and the role that business process outsourcing (BPO) might play in helping banks address their top priorities. In response to the survey forty four percent (44%) of executives said they planned to use BPO as a central mechanism to change their operating model.
Senior business executives from European retail banks report they are addressing the following top three issues: growing share of wallet by increasing sales to existing customers (91 percent), enhancing their business agility (88 percent) and improving their operating model (76 percent).
All of the banks surveyed say they already outsource at least one business process. Collections and debt management (outsourced by 82 percent) followed by customer service (outsourced by 56 percent) are the most extensively outsourced functions at present.
“The study shows that two-thirds of European banks look to BPO as a route to improved organizational agility by streamlining key processes through reengineering, simplification and automation,” said Rachael Stormonth, senior vice president, NelsonHall. “The outsourcing of certain business processes, in short, can act as an agent of change in the financial sector to help banks fundamentally re-shape their operating models.”
Reasons cited in the survey for considering BPO are to help with change and consolidation, to provide access to process-oriented expertise and best practices, to shift costs from a fixed to a variable transaction-based pricing model and to achieve greater resource and skill-set flexibility.
Although banks are considering using BPO to change their operating models, just 16 percent are currently considering using BPO to maximize revenue from their existing client base.
“European banks are focused on achieving their number one objective of increasing revenue by extending their relationship with their existing customers,” said Ian Coventry, director, worldwide financial process management, BPO for HP Enterprise Services. “Retail banks are already convinced of BPO’s ability to improve agility while reducing costs. However, HP’s deep BPO experience can also support a retail bank’s growth by helping it improve customer service and increase its ability to cross- and up-sell, at the same time speeding up the introduction of new financial products.”
HP has more than 35 years of experience providing insights, outsourced services, and positive business outcomes to the financial services industry. HP’s services help European retail banks enhance revenue and customer service, improve business processes, and consolidate operations. HP banking services include card and payment solutions, core banking services, consumer and mortgage credit services, and customer relationship management, as well as cross-industry business process, application services, and IT outsourcing solutions.
The study was conducted on HP’s behalf by NelsonHall, the leading BPO analyst firm. HP was not named as the sponsor for the survey. One hundred and eighty (180) executives from retail banks across Benelux, France, Germany, Scandinavia, Spain, Switzerland and the UK were interviewed in Q3 2010. The interviews were a series of open, closed, prompted and unprompted questions. For the purposes of the survey, the term BPO is defined as the outsourcing of business functions or processes and specifically excluded the outsourcing of IT services. The study was focused in particular on banking industry-specific processing services in areas such as origination or administration of unsecured loans, mortgages or cards, collections and debt management services, and customer services.
HP’s viewpoint paper can found here