We’ve also seen a lot of M&A activity, which has resulted in fundamental organisational change in the industry. This too has affected decision makers in these organisations, many of whom have either moved up, on or out. This trend is particularly prominent in the UK life insurance industry.

However, most financial services companies are now aware that they need to start moving forward and offering new products and services – the worst of the crunch is (hopefully) over and it’s time to embrace change and rebuild market share. This will be a good thing for outsourcers.

For instance, the demand for OPAL’s services has been steadily increasing – particularly because of our ability to help financial services companies launch products quickly. We see this as part of a wider realisation within the industry that outsourcers can share the risk of implementing solutions. Once the period of hiatus caused by the stalling economy settles down over the next 12-18 months we predict a surge of new products and services.

Outsourcing certainly seems to have moved to the top of the agenda for decision makers whereas, in the past, it had been regarded as a last resort when organisations wanted to give a problem to someone else. Now, financial services’ decision makers are taking it seriously as a strategic option.

The impact of the crisis and downturn upon providers, in terms of their offerings to their existing financial services clients, was mainly surrounding ‘business retention’. This has always been a buzzword used in the industry but very few FS organisations had taken it seriously enough. However, business retention is now considered an economic necessity and companies are focusing on their client bases and trying to figure out how to retain customers and offer new products and services to them.

The industry is much more aware of regulation and its impact and it is becoming far more ingrained in what they do. Outsourcers are becoming more compliance-savvy as well. As such, the crisis is likely to provoke an improvement in customer experience over the longer term. It is harder in this climate to recruit new customers and so retention of current customers is vital.

With new technologies available, a savvier consumer base and new players such as Tesco and Virgin coming into FS with a clean slate and not hampered by legacy systems, the old dinosaurs are now going to have to wake up. These new players are able to create financial services offerings from scratch, looking at the industry from a much stronger retail perspective. Outsourcing will have a huge role to play in this, as these new players are unlikely to want to build expensive, cumbersome back offices from scratch.

As things pick up, we will see a much more competitive market – which is good news for the customer. At some point the industry will need to wake up to social media and find a way to engage with it. Regarding outsourcing, large FS institutions are going to ask themselves if they still want to have vast empires of resources or look to specialist outsourcers who are able to help them to meet these new challenges.

Tony Collins, CEO, OPAL, the financial outsourcing company www.opal-uk.com