Bpo Competitiveness Of Enterprises In The Financial Services Industry Research

Service outsourcing, as universally perceived, consists of two parts: Business Processing Outsourcing (BPO) and Information Technology Outsourcing (ITO). Financial Services industry (or BFSI sectors, which stands for banking, financial services and Insurance) is one of key arenas where BPO plays an important role at. According to conservative estimation, Financial Services swallows up one third of the total hundred-billion size global BPO market.Cost and risks of India's outsourcing business has been increasing continuously over years. Despite 46% of global offshoring market taken by the big outsourcing nation, MNCs has moved focus of their vision to other countries especially China. Meanwhile, heavy demand within China's domestic market has emerged due to the country's fast-growing economy, deregulation and reform of financial industry. Whereas domestic BPO firms are lack of experience, capabilities, manpower, which ultimately results in shortage of competitiveness, thus cannot fulfill the existing the market demand.This paper focuses on the BFSI BPO this particular vertical market segment and reviews the path of India's financial BPO development. Furthermore, the value of outsourcing to a financial institution is reflected by a real case study featuring a China's domestic insurance company's data capture outsourcing, and more importantly, it revealed the BPO opportunities derived from banking, insurance and credit card industries as well as making comparison and analysis on"the big four"domestic BPO supplier forces of BFSI sectors (which are MNCs, Indian suppliers, domestic suppliers and captive BPO centres of financial institutions themselves).Based on the investigation and practical experience, the author raised a series of severe questions existed among the domestic BPO providers (to financial institutions), which are: 1) struggling at the bottom of value chain making little or no profit at all; 2) being a relative smaller size that are not capable of taking"big orders", thus not achieving economy of scale; 3) being lack of industrial expertise and innovation, 4)being lack of manpower, but also with the issue of human resources overflow. In order to tackle down the above mentioned problems, the author proposed a few solutions: firstly, to clarify the corporate objective, to find the right market position and direction; secondly, to expand through diversified channels, accompanied by process innovation; thirdly, to recruit selectively and to participate in universally recognized authentications. Finally, this paper, taking China Data Group Ltd. as the prototype, for studying the current situation and issues existed in China's financial services industry, including market opportunities, the future, the rivalry, the advices to solve current issues and analyzing and summarizing the path taken under development of domestic financial services BPO providers.