The financial services industry saves a staggering £4.5 billion a year as a result of offshoring, research from global consultancy Deloitte has found.

According to the ‘Global Financial Services Offshoring Report’, the industry’s savings have grown exponentially during the past four years, with an increase in offshore headcount of 1800%. More than 75% of major financial institutions now run operations offshore, with the average number of offshore staff per organisation reaching 2700 in 2007.

The UK and US banking and capital market institutions are the key leaders in this trend. The UK financial services industry alone saves £1.5 billion per year through offshoring, says Deloitte.

The financial services industry has long-been a pioneer of the offshore outsourcing practice, and the trend shows no sign of slowing. In future, however, the most effective offshoring strategies will not simply exploit the benefits of cheap labour, says Deloitte.

“Financial institutions need to re-engineer business processes, or risk simply transferring offshore the legacy inefficiencies,” reads the report.

Deloitte Report

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