Why Outsourcing Financial Services Makes Sense

Making the decision to switch financial services providers can be difficult, particularly if you’re thinking about a co-sourced or outsourced operating model. We can learn a lot about what influences this choice and the difficulties faced by people who have already switched according to a recent LinkedIn survey.

Let’s examine the survey findings and consider their implications for you:

The rationale behind outsourcing Financial Services

Outsourcing is a strategic choice that can greatly benefit a company and is influenced by a number of important aspects. The most important factor, according to 32% of respondents, is access to talent and competencies. Businesses might benefit from specialized knowledge that might not be available internally through outsourcing.

Another important factor mentioned by 31% of respondents is cost effectiveness. Businesses can frequently save operating expenses by outsourcing while preserving or even improving service quality.

Additionally important advantages include scalability and flexibility (22%), as outsourcing offers the freedom to adjust to shifting market demands and expansion prospects. The time-saving benefits (14%) are also noteworthy, since outsourcing allows businesses to streamline procedures and concentrate on their core skills. Together, these elements show why outsourcing is a wise tactic for companies looking to boost productivity and spur expansion.

What prevents you from outsourcing?

According to the survey, 34% of respondents cited the loss of direct control as a major disincentive when considering switching service providers, making it the top issue when considering an outsourced or co-sourced operating model. Concerns about data security and privacy come in second at 32%. It makes sense—giving sensitive financial information to a third party necessitates a high degree of confidence.

It’s important to note, though, that 13% of respondents said nothing would prevent them from switching, indicating that they are open to the notion. This suggests that outsourced models are becoming more widely accepted and trusted.

Important distinctions between providers

There are a few key factors to consider while choosing an outsourced or co-sourced service provider. With 29% of respondents preferring depth of experience, it is the most significant

aspect. Improved client assistance comes in second at 26%, emphasizing the need for dependable and prompt service.

Additionally important are improved worldwide coverage and the employment of cutting-edge technology, which were deemed essential by 25% and 19% of respondents, respectively. According to these findings, experience and assistance are crucial, but so are the capacity to use cutting-edge technologies and offer extensive coverage.

Problems encountered when changing providers

There are difficulties associated with changing suppliers. After switching, a noteworthy 56% of respondents said they had noticed a drop in service quality. This emphasizes how crucial it is to carefully screen possible suppliers to make sure they can meet or beyond your present service standards.

Poor transfer procedures (14%) and data security concerns (15%) are further difficulties. It’s interesting to note that 15% of respondents said they had no difficulties, suggesting that the shift might go smoothly and trouble-free with the correct provider.

Future-oriented factors

47% of respondents said they would definitely think about co-sourcing or outsourcing their fund administration in the upcoming two years. 17% more people are considering their alternatives. This demonstrates a definite trend toward outsourcing, which is motivated by the requirement for specialized expertise, financial savings, and operational effectiveness.

How may we be of assistance?

When switching financial service providers, especially to an outsourced or co-sourced model, you must carefully consider a number of aspects to select a provider that will match your unique needs and guarantee a seamless, successful transfer.

By investing in creativity and talent, GERAI LTD has consistently upended the financial services sector. Our unified cross-asset-class platform and unique single-source solution, which support the entire value chain, leverage cutting-edge technology, and benefit from cross-jurisdictional expertise provided by a long-standing management team, set the standard for fund and asset servicing today.

An asset servicing partner with both local and worldwide expertise is essential for a successful international firm. Many managers are looking to suppliers who can offer multifaceted solutions as technology and scalability become top objectives.

Are you prepared to change? To learn more, get in touch with our staff.