Financial services and outsourcing: lead on loyalty. Here’s how.

From your local craft store to major multinationals, it’s no secret that companies of all kinds employ experts to deliver savvy financial plans or save them the headache of filing taxes. But while many outsource their financial functions, what about financial institutions themselves? Financial services outsourcing, not to be confused with outsourcing of financial functions, takes place when finance brands delegate non-core business processes to third-party providers. 

Which processes, exactly? A vast - and growing - range of functions. While external ICT has long been favoured for the latest tech without hefty investments, payment processing, compliance, and customer experience outsourcing are just some of the offerings gaining sophistication. The scope of specialized services is expanding, and so is the number of fintechs and finance organizations embracing them, placing the trend prominently on the radars of the highest authorities, including the European Central Bank and the Bank for International Settlements. And with 71% of financial institutions already on board with outsourcing, it’s clearly driven by more than a fad. So, what’s behind it?

Standing in line for hours, signing a never-ending stack of papers with a greasy ballpoint, squinting at technical descriptions of complex financial products. Decades back, dealing with this was par for the course in a bureaucratic financial sector. But today’s customers wouldn’t do it if you paid them - never mind stick with a financial services provider who subjects them to it. Digitization has radically reconfigured our expectations. By jumping at the demand for unprecedented convenience, fintechs have enjoyed a soaring ascent, forcing major players to catch up fast. For finance brands, surviving depends on offering seamless, swift service to customers of all kinds. Thriving means going even further, with exceptional finance CX serving as the key differentiator among tomorrow’s sleek leaders. 

Success in CX and beyond depends on staying abreast of exponential tech advancements. Savvy support bots, effortless automated insurance claims and loan applications, and AI business insights are among them. Meanwhile, cybercrime is proliferating as privacy regulations intensify to keep pace, with matching tech the key to tackling both. It’s a load institutions can’t carry - their hands are already full with financial developments like crypto and AI trading. It comes as no surprise, then, that specialist partners fully focused on their spheres of excellence are more critical than ever. After all, an organization is only as strong as its weakest link - but brilliance in a single function could colour your business’s overall operational excellence. Let’s discover how.

Part contemporary pillar, part competitive advantage, financial services outsourcing is more popular than ever. But before your brand embraces specialist providers to revolutionize functions across your operations, it’s crucial to understand the benefits that make outsourcing so powerful, versatile, and holistically impactful:

• High efficiency meets peak performance: Maximizing performance and resourcefulness simultaneously is the heart of any leading business. Your outsourcing partner is no exception. From IT support to customer experience, their competitiveness depends on offering you top service at winning prices - prices facilitated by substantial economies of scale in their area of expertise. This gives fintech startups access to what would otherwise be prohibitively costly, but scaleups and superstars stand to gain too in an economy where every margin matters.
• Flexibility and scalability: The same scale behind vendors’ favorable prices offers another advantage: flexibility. Savvy financial services providers don’t sink time and funds into upgrades, expansions, and associated growing pains that hinder hard-won expansion. Instead, they bring in nimble outsourcing partners who can ramp services right up - and down - as budgets, needs, market conditions, and strategies evolve.
• Direct access to top talent and tech: Expertise takes decades of experience, training, and funding. Technology requires updates, maintenance, ICT specialists, and repeated hefty investments. By hiring a leading service provider, your business gets to skip right past the awkward phases, harnessing the insight your partner has gathered serving competitors while receiving the latest and greatest across talent and tech, compliance, and best practices.
• Focus on core competencies: Even the most skilled surgeon doesn’t have enough hands to operate alone. Similarly, handing select functions to the specialists isn’t exclusively about them doing what you can’t. It’s about getting your core operations right with the clinical precision that regulators and customers require in a complex, competitive financial landscape. The time, costs, and energy saved make for a finance firm that’s focused, optimally resourced, and able to reach its full potential.

 Like a brilliantly diversified portfolio, the whole that these benefits form is greater than the sum of its parts. At its best, financial services outsourcing forms a robust system propelling your brand towards new peaks in performance and returns alike. But that’s not to say no risks apply. What are they - and how can you tame them?

Delegating: it sounds like a delightful relief, but for many, it comes with anxiety. The desire for perceived safety and control holds some finance businesses back from partnering with the pros. Of course, any relationship comes with risks. Some fear operational disruption caused by poor communication and integration. Others are afraid of entrusting financial services outsourcing providers with something as sensitive as client-facing conflict resolution, fearing reputation fallout should reps go rogue. Or what if an IT partner falls victim to a data breach, resulting in exorbitant penalties, lawsuits, or worse? 

These fears are not completely unfounded. Incompetent vendors exist. But the gravest dangers often lie where companies least expect them: in tackling too many specialist functions alone. This leaves brands both overwhelmed and lacking the experience and expertise needed to resolve - never mind mitigate - the above risks and more. 

Who can you trust? Choose a partner with a proven track record of excellence across clients, customers, and regulators. In the first instance, look for a strong portfolio of case studies showing clear, tangible results delivered to financial institutions, companies sharing your target market, and others tackling similar challenges. Consider compatibility on culture, values, and offerings. Industry awards and recognition can offer an extra layer of social proof. Secondly, ensure that your provider complies with the latest security and privacy standards, including ISO 27001, GDPR, SOC 2, and PCI DSS. You’ll more likely than not find a partner whose prowess is proven by far more evidence than any internal department could provide. After all, your secret weapon is their bread and butter.

Right experts, right aspects - that’s the key to financial services outsourcing success. But while today’s finance enterprises experiment with outsourcing all kinds of functions, which areas offer the greatest results? When it comes to satisfaction, loyalty, and market share, the math is simple: the more customer-centric the investment, the bigger the competitive boost. And as more brands shed branches to compete with digital-first fintechs, there’s one way to truly connect with customers: exceptional CX.

Unsurprisingly, bringing the very best on board to deliver unmatched customer experiences is a uniquely rewarding strategy. That’s why leading brands count on financial services outsourcing where it counts - these five central financial services CX processes:

Doing it all yourself or doing what it takes to win? Faced with this choice, it's no surprise that finance brands are racing towards financial services outsourcing for everything from IT to HR. While relying on in-house departments often leads to strain and costly trial-and-error, bringing in the pros does the opposite, saving resources for your business’s beating heart while securing the flexibility and brilliance your brand needs to succeed.

Nowhere is this more impactful than with your CX. Here, the right experts don't just skyrocket customer service efficiency. They secure top talent, make a priceless first impression, proactively prevent churn, and resolve crises 24/7, all while harmonizing privacy and security with golden customer and market insights. Ready to embrace outsourcing where its rewards are the greatest? You'll need an experienced, proven partner offering nimble, bespoke solutions. Trust Transcom to transform your customer experience for record loyalty and a competitive advantage that lasts.