By Nick Heath, 18 June 2008 14:59
NEWS
The credit crunch is predicted to drive greater demand for outsourcing in the financial services sector.
Almost half (41 per cent) of 70 financial services managers questioned in a survey by the Management Consultancies Association (MCA) and the British Bankers' Association (BBA), expect to increase their current levels of outsourcing because of the credit crunch.
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The survey found that 90 per cent of the companies have already outsourced part of their business and one-third had offshored work.
But there are still doubts about returns from outsourcing, with only 54 per cent saying they felt their organisation understood how to get good value from outsourcing and only 24 per cent saying they adequately understood the offshoring industry.
Almost all (90 per cent), of those questioned felt outsourcing is now an acceptable way to do business.
Fiona Czerniawska, author of the report and director of the MCA's Think Tank research unit, said in a statement: "While innovation and creativity is exciting, the credit crunch has also created something of a wake-up call to the financial services sector. Many institutions which have so far ignored the benefits of outsourcing are being forced to revisit it because of financial constraints and liquidity problems."
Comments
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1. Karen Challinor
the credit crunch drives banks to offshore IT work
this makes UK IT workers into jobseekers claiming benefits and with a diminishing job pool they may be there for a long time
this puts up the taxes of those with a job
this causes higher wage demands from those with a job or causes people to lose their jobs due to their overheads being too high for their take home pay
this causes higher prices and in some circumstances redundancies or companies going bust, so less money in circulation
this causes people to pull their belts tighter as the economy enters an inflationary stage
this causes a credit crunch as people try to reduce their outgoings
this causes banks to offshore as they get less profits from lending and in a typical knee jerk reaction reduce their head count
nicely symmetrical isn't it, probably a bit too simplistic but I'll bet the banks haven't thought this through