The turbulent market is driving cost-based outsourcing, but transformational outsourcing is in for the long-haul, says EquaTerra

Economic volatility may trigger further business process transformation in the financial services sector according to new research from EquaTerra, the business advisory firm.

The research reveals that financial services firms are changing strategy in response to opportunities and threats created by globalisation. Additionally financial services outsourcing buyers have become more focused on cost avoidance and are looking at outsourcing as a means to defer or amortise investments in new IT.

However, the research found that long term outsourcing is still viewed as a strategic tool and a way of enabling business process improvement and innovation.

As a result, EquaTerra expects demand for financial services outsourcing to grow at a more rapid pace, (seven to eight per cent annually over the next five to seven years), in response to both current market challenges and opportunities.

Stan Lepeak, EquaTerra’s Managing Director of research, said: “Financial services firms understand they need to reduce complexity across the board to lower costs. A growing need to customise new product and service offerings to capitalise on emerging markets is adding urgency for operational innovation.”