Why Financial Companies Prefer Offshore Outsourcing
August 15, 2008 · Print This Article
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By Py Cobb
Well, there are many reasons and one of the most prominent among them is that offshore outsourcing is carried out mainly from developing countries having a vast talent pool of young and ambitious professionals, for whom it is a dream come true to work for large financial companies listed on Wall Street.
This makes it easier for outsourcing firms to hire the required number of personnel as might be necessary for managing outsourced processes of financial companies. Finding people having the right qualifications is not a problem because some prominent outsourcing locations such as India produce thousands of qualified MBAs and CFAs every year, making it easier for outsourcing firms to hire them.
These professionals can work within the arena of financial research, which in itself is comprised of different internal activities. For example, an analyst could be linked to the overseas, client-facing side of an investment banking division and be required to provide support for merger and acquisition activities. Or he may do equity research for a brokerage firm or provide information to hedge funds. So functions like company valuations, credit analysis, financial and statistical modeling and tracking stock prices can easily be managed by these professionals.
In addition to CFAs and MBAs, mathematicians, statisticians and business graduates with some experience can also be employed at very low costs. These basic qualifications are enough to get in, but they form just the raw material. The equivalent skill set between the US and India is hard to define and this is why financial companies and outsourcing firms want people who have passion and the potential to be trained. Outsourcing firms believe in providing the necessary training as not every educated professional is well versed in what he or she might have studied during school. To train the young recruits, outsourcing firms organize compulsory training schedules that include sessions on valuation and U.S. GAAP rules, building familiarity with the functioning of ibanks and Wall Street, and cross-cultural training.
For filling up senior positions at their outsourcing hubs, outsourcing firms prefer to recruit people having two to three years of experience with banks, financial services firms, finance-related BPOs or with the corporate finance departments of companies. Although average salaries payable to these professionals is rising at an average rate of 15 to 20 percent per year, the benefits still outweigh the costs many times over and this is why financial companies are still bullish on India. Salaries payable to these professionals vary depending on their qualifications and often an additional payment component is also included in the form of bonuses.
However, increased pay packages are not the only thing that outsourcing firms are offering to their employees. The quality of work is also important since an analyst in India does the same company profile, DCF analysis and capital structuring analysis as an investment banker analyst in the U.S. In terms of advancement within the organization, professionals can look forward to additional job responsibilities, higher pay, better exposure and, in more senior positions, client-facing roles. At the senior level, people have to take responsibility and they should have the right attitude and be committed towards getting things done. Such people are being given preference by both outsourcing firms and financial companies. When the right people are on board, it helps financial companies achieve desired goals and objectives.
Telegenisys India Pvt. Ltd is primarily focused in providing a full spectrum of BPO - Business Process Outsourcing Services in the area of software design and development, call center/customer support, accounting, administration, inventory management, data entry services, research, CAD Design Support, insurance and risk analysis for medium sized enterprises.
I completely agree with the post, I think low cost labour is one big reason for offshoring, but nowdays ,since the Indian employees have proved their worth over the years, Companies are taking offshoring more seriously and now low cost labour is not the only factor for outsourcing. Companies like http://www.cleaveglobal.com a Bpo company who provides end to end business services to their clints are growing every year.
[…] Aside from cost savings and automation of processes, banks and financial companies prefer outsourcing because of the vast talent pool in offshore locations. “Finding people having the right qualifications is not a problem because some prominent outsourcing locations such as India produce thousands of qualified MBAs and CFAs every year, making it easier for outsourcing firms to hire them. These professionals can work within the arena of financial research, which in itself is comprised of different internal activities”, reports Call Center Café. […]