Commercial Banks To Outsource Research

Outsourcing means "resource get from outside". Bank gives hisinner-business to the service provider through the contract. Banking hasset foot in the areas of outsourcing in the early 1970's, but neverdeveloped so swift and violent like these years. International bankinghas involved in the wide areas of outsourcing, beyond the IT service, itmoves to the core business areas, such as human resource, loan businessand so on. The outsourcing has also practiced in our country, but we arevery prudent as lacking experience. This paper has discussed theoutsourcing of commercial bank comprehensively and divided into fourparts. Section one focused on the theories based on which outsourcing camein to being. First from the model of the Williamson I discussed theinevitability of the outsourcing in the real economy and know the exitof the outsourcing came into true if there has the Economies of Scale andEconomies of Scope。Developed the model of the Williamson, with the rapidprogress of the technology, the reducing of the cost and the uncertaintyof the environment, the existing of the outsourcing became the necessity.Following from the three latitude (property special-purpose,transactionfrequency and uncertainty)of transaction cost theory,I found the mostbusiness of the commercial bank have the upper property special-purpose.So the business in commercial bank should choose between outsourcing andinterior government, at that time the transaction frequency anduncertainty play a important part. Then I use the theory of Core abilityto discuss the development of outsourcing. The theory of Core abilitydivides the corporation resource into three parts: core resource,outsourcing resource and marketing resource. As the core ability can bringthe extra value to the corporation, it should beyond the outsourcing. Thenon-core ability can form the deposition cost, so we should outsource it.Then I put forward the model of core ability of the commercial bank. Thelast part refers to the bank re-creation, the purpose of it is to high-upthe core ability of the commercial bank, and the useful method isoutsourcing.Section two discussing the meaning and the cause of the outsourcing.First talking about the meaning and point out the meaning of theoutsourcing change with the theory and the practice, outsourcing is a newstrategy thought and a management mode. Following concluding threepatterns from many, they are: One-to-one correspondence, Strong-strongunion, Adhere-centre. Discuss every patter's character and the practice.In the second part of the section two, I discuss the causes of outsource,it has exterior-cause and interior-cause. The exterior-cause contains:rapid development of technology, the economy globalize and the financeincorporate, the quick change of the market environment. Theinterior-cause contains: forming the core ability, getting the outsideresource, reducing the cost and increasing the efficiency, separating therisk in the management and produce and satisfying the regulating.The third section focused on the bank's business of outsourcing. FromITO to BPO and KPO, the development of the outsourcing reflects the changesof banking in these thirty years. In recent years, the off-shoreoutsourcing prevailed and many banks have the centre of the off-shoreoutsourcing. Then I talked about our bank's outsourcing practice, andput forward the three steps our nation bank should carry out. Firstoutsourcing the simple and standard business, for it contributes littleto the profit of the bank. Then considering the non-core business of bank,which contacting little with the customers and orient-standardization.The last turns to the backup core business, as maybe the bank has notqualified for those businesses.The last section refers to the risks and the method to manageeffectively. The risks contains: strategic risk, reputation risk,compliance risk, operational risk, exit strategy risk, country risk andso on. Based on the risks, I proposed the management method, such as:seeking the outsource activities, prudent to choose the service provider,the contract should contains all material aspects of the outsourcingarrangement, establishing a comprehensive outsourcing risk managementprogram and establish and maintain the contingency plans.