BPO in Swiss Banking: Current Situation and Prospects

Online, June 30, 2011 (Newswire.com) - After 7 years of discussion on the industrialization in the banking industry, BPOs are being recognized as an acceptable form of back office organization. Nearly every bank makes use of the practice.

BPO is far from being a perfect product. Several aspects must be further developed in order to bring cost advantages of 30% profit for banks and 15% for service providers. Today that is not always the case.

The focus of attention is the standardization of processes using a model bank. What seems obvious is still difficult to enforce in the daily business. Banks must help the BPO service provider implement a business standard by installing a COO and reorganizing the middle office and the product structure.

For everyone involved, banks and service providers alike, a large cultural change is to be expected. While banks concentrate more on the customer and the details of the commodity functions, the service provider, must adapt, turning back office workers, accustomed to having a captive client, into service providers able to react to a constantly changing market. Both parties have in common that they must trim down and make processes more lean. Contrary to how it appears at the outset, this affects service providers more than the banks.

The banking BPO will continue to develop the relevant standard platforms whereby it is quite possible that there will be several service providers for larger and smaller banks.

Accordingly, the heterogeneity of the Swiss banking industry today with about 50 vendors remains quite fragmented and is likely to consolidate in the coming years.

Banking skills and the ability to create economies of scale for the model bank and operational excellence are the most important factors for success from the service provider side. On the banking side, the most significant components are the ability to define and simplify new processes and to realize the benefits.

Detailed information about this article and more publications on: http://www.trestlegroup.com/wp-content/uploads/2011/06/TGC_SwissBankingStudy_June2011.pdf

Goal of the Study
For the past years, BPO has established itself as a factor of Swiss banking. Therefore it is time to take stock of experiences and lessons learned.