Financial services companies are currently capturing less than one-third of the potential cost savings offered by offshoring operations, according to a study by Deloitte Touche Tohmatsu (DTT).
The study found that high performing financial institutions offshore 6.7% of their global headcount, well ahead of the study average of 3.5%.
If all surveyed companies that offshore were to reach this \u2018best practice\u2019 headcount ratio they could reduce their collective annual cost base by US$16 billion \u2013 more than tripling their current reported savings of US$5 billion.
DTT surveyed 62 global financial services institutions including some Canadian organizations.
However, DTT argues, too many financial services companies remain less than fully committed to offshoring for this higher ratio to be achieved, among them some of the Canadian financial services companies, that have been cautious in their approach.
\u201cOffshore operations that aggressively expand in scope and scale typically deliver much higher returns,\u201d said Gordon Shields, partner at Deloitte, in a news release.
The study concludes that expanding both the scope and scale of offshoring operations is key to realizing these unclaimed savings.
Other key findings:<\/p>\n
The study also shows that the best offshoring results are often achieved during the first few months of operation, before declining through the first year as financial services companies confront the learning curve and struggle to increase scale. This trend reverses through the second and third years, with performance steadily improving as companies gain offshore experience.
Deloitte Touche Tohmatsu\u2019s third annual offshoring study is based on interviews with 62 global financial services institutions \u2013 including 8 of the top 10 by market capitalization \u2013 based in 12 countries. Of the 62 institutions surveyed, 33 are currently operating offshore, nine are making plans to offshore, and 20 currently remain purely onshore.<\/p>\n","protected":false},"excerpt":{"rendered":"
Canadian firms taking a more conservative approach compared to their global counterparts<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2312,2318],"tags":[3020],"yst_prominent_words":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/326958"}],"collection":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/comments?post=326958"}],"version-history":[{"count":0,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/326958\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media?parent=326958"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/categories?post=326958"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/tags?post=326958"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/yst_prominent_words?post=326958"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}