An Indian Civilizational Perspective

Financial research Outsourcing

The outsourcing of Financial research is taking place at a rapid pace.. to India.. here are some of the factors why?

Key drivers of financial research outsourcing

As stated earlier, the current understanding of the KPO space includes a wide range of sectors. Financial research is one such sector. According to a 2003 study conducted by the financial services practice of management consulting firm A T Kearney, American banks, brokerage firms, insurance companies, mutual funds and other financial services firms are planning to relocate more than 500,000 jobs offshore — representing 8 per cent of their workforce — over the next five years.

Indeed, by end-2005, Deloitte & Touche expects the top 100 global financial-services firms to offshore more than $200 billion of their operating costs and save more than $700 million.

Factors causing this stream to turn into a torrent:

Huge cost savings of anywhere between 40 and 60%;
Shrinking stock research margins due to the Internet-aided trades;
Global research settlement and the resultant need to provide independent research to clients;
Proliferation of independent research firms due to huge under coverage of small and medium stocks;
Acute shortage of skills and high personnel costs in the key markets;
Huge talent pool in outsourced markets;
Ever-improving information and communication technology;
Mature process and project management capabilities at both ends due to prior experience of managing BPO engagements.

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