Why the Banking Sector Should Outsource Financial Services to a BPO Provider

The COVID-19 pandemic triggered an economic crisis that sent shockwaves across the globe. With this as a “wake-up call,” banks initiated proactive measures to curb its economic impact and begin their journey toward fiscal recovery.

However, these measures might end up futile if the sector remains complacent. To future-proof their resources and safeguard their assets against economic uncertainties, banks and finance companies can outsource financial services from reliable BPO companies. 

Importance of Outsourcing for the Banking and Financial Services Sector

Over the last few years, increasingly more banks have turned to financial services outsourcing to address some of the most significant challenges facing the industry: complexities of digital transformation, soaring operational costs, and outdated systems.

Let’s take a closer look at how outsourcing companies can benefit the banking industry.

Accelerate Digitalization and Innovation

Digital advancements continue to impact how people interact and conduct business — and the banking experience is no exception. Take a look at the following stats:

• Almost 80% of consumers who use mobile banking report that it’s their primary way to access their bank account. 
• 78% of U.S. consumers prefer mobile apps and online banking over visiting physical branches. 

As contactless transactions gain momentum for their accessibility and convenience, more people are adopting financial technology (FinTech) for their banking needs. To ride the growing tide, the financial sector must be equipped to embrace digital transformation and innovate its processes.

Digitalization helps banks with the following back-end functions:

• Developing software programs specializing in data entry and task automation.
• Implementing multi-factor verification and biometric identification to prevent fraud, protect sensitive data, and minimize cyber-attacks.
• Leveraging cloud computing to store, process, and decipher data.

Digital-only banks (known as neobanks) are also poised to transcend traditional banking, with a 46.4% spike in the number of U.S. neobank account holders from 2022 to 2026. Given the ever-evolving nature of the financial industry, banks must stay in tune with emerging market and industry trends for a competitive edge. Fortunately, they can leverage outsourcing as a strategic approach to stay ahead of the curve. 

Delegating back-end processes — such as accounting and data analytics — to service providers alleviates the burden on their in-house employees, leading to better business outcomes, higher customer satisfaction rates, and quicker time-to-market.

Reduce Operational Costs

Banks are constantly tug-of-war between great customer experience and optimized operational efficiencies. But with global challenges pushing financial institutions over the edge, they are forced to rethink how they can best allocate their resources.

For a clearer depiction of the severe consequences stemming from poor financial management, let’s look at the following case study:

In 2023, Silicon Valley Bank (SVB), a prominent lender for startup tech companies, abruptly collapsed due to its inability to meet debt obligations to depositors — going down in U.S. history as the second-largest bank failure since 2008.

This could have been easily avoided if SVB strategically cut down unnecessary expenses with outsourced financial services. By outsourcing non-core functions, it can redirect more resources toward core functions — while ensuring that their operations remain secure and compliant. The bank also stands to benefit from BPOs’ vast customer service knowledge when it comes to navigating potential debt-related conflicts with their depositors. 

Ultimately, this case underscores that banks don’t have to choose between customer satisfaction and streamlined operations. With proactive strategies like outsourcing, they can easily navigate the complexities of the modern banking landscape at a competitive cost advantage. 

Gain Access to the Latest Technology and Specialized Expertise

With machines expected to take over 10-25% of tasks across bank operations, there has been a growing focus on the vast potential of Robotic Process Automation (RPA) to digitalize business processes for banks and finance institutions.

Automating administrative and bureaucratic tasks doesn’t just lead to resource savings; it also relieves employees of time-consuming work burdens, empowering them to channel their energy towards higher-value tasks that drive financial growth.

How can banks achieve this? The simple answer is through outsourcing services.

Not only does outsourcing offer banks innovative and cutting-edge infrastructure for digital collaboration, but it also provides access to highly skilled talent who are experts in emerging tech trends for financial services.

Here are some other digital services these outsourced specialists can work on:

• Digital Bank Account Creation: Providing a secure application process for prospective users.
• Application Programming Interfaces (APIs): Allowing interaction between external apps and electronic banking systems to garner data analytics and transfer funds, among others.
• Video Conferencing: Developing an application where banks can conduct online meeting sessions with users for financial advice.

As certified tech savants, these service providers can easily create the winning combination of digital transformation programs to help the industry unlock up to $1.25 trillion in market capitalization.

Outsourcing Solutions for the Finance and Banking Industry

In an era plagued by staff shortages, high inflation rates, and cyber security attacks, it has become vital for financial institutions to explore the benefits of outsourcing from prime destinations such as the Philippines (Call Center Capital of the World) and Colombia (Silicon Valley of Latin America). 

Boost your competitive edge through a strategic partnership with reliable and trustworthy BPOs that offer innovative, personalized, and valuable solutions. Here are some tasks that providers can take over:

• • Application Processing: Processing bank-related application processes such as loans and other accounting services.
  • Banking Renewals: Renewing clients’ deposits for the same conditions and interest rates upon maturity.
  • Clearance and Settlement: Transferring financial ownership from one party to another.
  • Collections: Gathering monetary obligations or debt from businesses and customers.
  • Credit Approval: Assessing the creditworthiness and eligibility of borrowers.
  • Default Management: Communicating with clients who failed to pay their loans promptly.
  • Document Management: Organizing information on clients, employees, accounts, and operations.
  • Document Processing: Automating documents with unstructured information.
  • Fraud Mitigation and Detection: Securing databases, cross-checking data entries, monitoring transactions, and predicting conventional fraud schemes. 
  • Loan Disbursement: Depositing the agreed-upon funds to the borrower’s account.
  • Payment Processing: Collecting a fee for every processed payment.
  • Portfolio Analytics: Evaluating, organizing, and overseeing assets.
  • Records Management: Managing and administering the company’s financial analysis through analog or digital means.
  • Recoveries Processing: Acquiring outstanding debt that clients may have defaulted.
  • Regulatory and Program Compliance: Monitoring and complying with government-enforced regulations.
  • Transaction Processing: Resolving customer complaints regarding banking processes.

So, what are outsourced financial services you can take advantage of? 

Customer Service

The success of financial institutions hinges on their ability to meet rising customer expectations. And in the digital, post-pandemic landscape, the stakes are even higher when it comes to addressing pain points in the customer experience. Failing to do so could potentially result in customer churn.

Therefore, the financial sector must provide engaging, frictionless customer service at every touch point. With customer-centric experiences, the banking industry is more likely to:

• Generate 66% higher sales growth
• Improve customer retention by 25%
• Increase net profit by 10%

Unfortunately, not all banks have the resources and expertise to maintain a quality customer support team. For banks seeking a competitive advantage despite limited resources, financial services call center outsourcing from the Philippines and Colombia may be your best bet.

Take a look at what your outsourced customer service team can do for you:

Provide more personalized customer experiences.

Customer loyalty is hard to earn — but easily lost. If banks can’t stay attuned to consumer needs, they risk losing to their competitors.

Since bank concerns usually touch on sensitive financial issues, they need a tailored approach instead of a formulaic, one-size-fits-all solution which can seem like a machine void of empathy. In fact, 72% of CX leaders agree that “made for you” products and services lead to stronger customer loyalty and retention.

With an outsourced call center, you can ensure personalized, memorable, and genuine experiences for your clients. Using tools such as APIs, customer care agents can leverage data insights to understand clients better and tailor a service model designed especially for them.

Answer customer questions and feedback through multiple channels.

The Consumer Financial Protection Bureau (CFPB) reported that the volume of complaints per month has tripled from December 2019 to October 2022. However, despite the spike in touch points, customers still expect quick, proactive, and satisfactory resolutions to their concerns. Failure to deliver would inevitably translate to lower retention rates and negative reviews that could tarnish your reputation.

What’s the best way to reach your clients? Whatever is most convenient for them.

With consumers nowadays juggling between multiple channels (social media, email, live chat, phone, or self-service), banks can leverage omnichannel support to cover all their bases. Just take a look at these stats:

• 62% of customers prefer seamlessly conversing across multiple channels.
• 75% seek consistent experiences, regardless of the channel.

Banks and finance companies that struggle to keep pace with the volume and complexity of touchpoints can leverage the vast resources of outsourced CX teams from the Philippines and Colombia to elevate their customer experience. As experts in the customer service industry, they have extensive access to various channels — including phone support, email, social media, and online banking apps — enabling them to accelerate response times and significantly boost your customer satisfaction (CSAT) scores.

Offer multilingual support services.

In the U.S., 67.2 million (21.7%) people don’t speak English at home – and an additional 25.5 million speak the language, but not fluently. Sadly, most bank and finance companies only provide services in English, making it difficult for this non-native English-speaking demographic to navigate financial transactions and access customer support. 

The language barrier also contributes to the staggering rate of “unbanked” households. For reference, while 4.5% (about 5.9 million people) of U.S. households have no checking or savings account, the percentage is much higher (8.4%) in the Hispanic community. 

To overcome this challenge while improving their cash flow, it’s imperative for banks to provide multilingual support for customers. This tested-and-proven strategy will allow banks to expand their reach, making finance services more accessible to non-native English speakers.

The most convenient and cost-efficient way to achieve this is through outsourcing. Since Colombia and the Philippines are both multilingual, they can easily cater to diverse races and ethnicities in the U.S. while still maintaining linguistic sensitivities and cultural nuances. 

Accounting and Bookkeeping

A bank’s principal role is to safeguard financial assets and provide loans to individuals and business owners needing funding. Given their critical role in the economy, they must maintain at least 8% of their capital in their reserve to survive unforeseen recession while still covering the fiscal needs of businesses and households.

Failure to maintain these funds could mean an unfortunate fate similar to that of Silicon Valley Bank. How can they gain financial foresight while protecting their bottom line and clients’ assets? Through accurate accounting functions — the lifeblood of any successful bank. 

Accountants and bookkeepers oversee daily transactions such as account payables and receivables, ensuring the bank has sufficient funds to address its customers’ needs. Moreover, they can play detective by identifying discrepancies in a bank’s financial data — and quickly rectifying those errors for accuracy and transparency. But most importantly, the bookkeeping and accounting team makes sure that banks are compliant with ever-evolving federal regulations.

Without them, banking institutions will struggle to stay afloat. However, the “quiet quitting” trend infiltrated the finance sector, causing an enormous drop in the workforce. While over 300,000 (17% drop) accountants and auditors resigned from their posts in recent years, the declining number of accounting students won’t suffice to fuel the talent pipeline. 

According to the Association of International Certified Professional Accountants (AICPA), accounting graduates fell nearly 9% — from 57,500 in 2012 to 52,500 in 2020. To bridge the talent gap, U.S.-based companies need to seek talent beyond their local borders. 

By leveraging BPO capabilities, firms can source remote staff in the Philippines and Colombia.

The Philippines has almost 200,000 certified public accountants (CPAs), all well-trained in international accounting standards and procedures. Colombia, on the other hand, enacted a law in 2009 to converge their national accounting standards to the International Financial Reporting Standards, making it even more convenient to work with their accountants. With these countries’ talent-rich pools, banks can fill the industry’s pipeline with qualified accountants and bookkeepers who are adept at safeguarding assets and fueling financial growth.

Back Office Solutions

Back-office functions may not directly drive bank revenues, but they’re critical in maintaining successful and seamless transactions. When banks delegate administrative functions to back office support teams, they are able to relinquish themselves from the burden of non-core tasks and focus on more revenue-generating projects.

Here are just a few of the back-office activities that banks and financial institutions can turn over to a BPO provider:

Data Entry and Record Maintenance

Financial data is the backbone of the banking industry. 

By observing accurate and efficient data entry and maintenance practices, banks can keep their databases updated — enabling them to comply with financial regulations, monitor current trends, and manage their financial assets. However, considering how tedious this task can be, it would be wise to delegate them to teams in the Philippines and Colombia. 

Here are a few of the data entry tasks banks can outsource:

• Customer Information Data
• Deposit Savings Account Data
• Credit-Card Transactional Data
• Bank Charges
• Account Transaction Data
• Credit Score
• Risk Assessment Data

Outsourcing data entry to qualified and capable vendors allows banks to leverage cutting-edge tools and technologies such as Robotic Process Automation (RPA) which efficiently organize and store data for accurate records that fuel decision-making.

Human Resources and Recruitment

High turnover rates, disengaged employees, and dated HR solutions are among the biggest challenges faced by the banking industry. In fact, 83% of HR managers find employee retention a more difficult endeavor than recruitment.

With the help of outsourced HR professionals, banks can source a pool of qualified and motivated talent to fill workforce needs and help achieve business goals. Service providers also effectively manage employee performance and resolve HR issues head-on, leading to a healthy environment that increases work productivity and customer success rates.

Information Technology (IT)

With the rise of online banking comes the rise of cybercriminal activities. 

Most (71%) of data leaks are financially motivated. With the cost of cyberattacks per organization hitting $18.3 million yearly, roughly 80% of Americans have changed their banking behavior for fear of attacks.

To ensure data integrity and safety, banks need the expertise of IT specialists. Renowned for their thriving BPO ecosystems, outsourced IT professionals in Colombia and the Philippines can enhance your data security to avoid costly breaches and loss of client trust. These tech experts are also skilled in developing cybersecurity software, systems, and practices that can actively prevent unwanted cyberattacks.

Data Science

One of the reasons banks collect data daily is to gain deeper insight into their market through consumer transactions and touchpoints. However, when data is unstructured, extracting these crucial insights can become cumbersome.

In a study, over half (54%) of financial executives agreed that data silos remain one of the biggest drawbacks to progress and innovation. As such, most (62%) of them seek to prioritize data management to bolster agility, improve operational efficiency, and ensure effective decision-making processes.

Data is indeed critical in the industry, but if handled carelessly, data errors can cause misguided business decisions that will harm your bottom line. To avoid costly mistakes and successfully transform data into lucrative returns, consider outsourcing data science roles to teams in the Philippines and Colombia. Take a look at how you can benefit from harnessing the power of data:

• Detect fraudulent transactions sooner.
• Design risk modeling to oversee financial activities.
• Provide solutions for incoming problems.

Outsource Financial Service With SuperStaff For Your Success

There’s no denying that banks are under relentless pressure to modernize and innovate their operations — and the answer lies in outsourcing.

At SuperStaff, a leading BPO provider with a strong presence in the U.S., Colombia, and the Philippines, we strive to elevate your financial services and steer you through difficult economic uncertainties. Using our highly advanced software, we will streamline your operations and improve your financial strategies cost-efficiently. Well-equipped with service-oriented models, our teams can leverage their exceptional customer service skills to serve your clients’ needs with urgency, efficiency, and utmost satisfaction.

By outsourcing accounting solutions to our firm, you can rest assured that your bank’s cash flow, customer base, and operations will continue to grow with the dynamic market.