The global banking sector is currently undergoing fundamental changes. Banks face new challenges created by socio-economic and political developments and the potential of new information and communication technologies. Competition has risen to formerly unknown levels and active management of costs has become an ongoing tasks.
Unlike the manufacturing industries most banks still cover large parts of their value chain by themselves. Lead by Anglo-Saxon institutes global banks have started in recent years to use the advantages of globalization by splitting up their value chains and by offshoring selected functions to countries offering wage differentials. According to experts banks have just started to create their global sourcing model, so that the offshoring volume is projected to increase further.
While most banks have started their offshoring initiatives with IT functions, business process offshoring and even knowledge process offshoring have now become the main drivers of the move to the key offshoring locations like India, China and Eastern Europe.
Banks from Switzerland have been spectators to the global move towards a global delivery model for many years. Only its two large global banks – UBS and Credit Suisse – have started offshoring initiatives yet trying to catch up with their global competitors. They face challenges especially from the legal and regulatory side, which are specific to offshoring from Switzerland, and have to balance cost discipline with keeping the high standards in quality, security and confidentiality, which are the base for the high reputation of the Swiss banking market.
The primary objective of this paper is to give an overview on the current status as well as on trends in business process offshoring by banks in general and on offshoring from the Swiss banking market specifically. As Swiss institutes lag the global offshoring trend, the specific conditions for offshoring from Switzerland will get analyzed.
Secondary objective of this paper is to give a high-level introduction to the key issues in business process offshoring:
- What are the organizational options in offshoring?
- Which banking processes are suitable for offshoring and what are the criteria for identifying them?
- What are the main offshoring locations and criteria in the site selection?
- What are the drivers, but also risks and benefits of offshoring?
Inhaltsverzeichnis (Table of Contents)
- 1 Introduction
- 1.1 Current Situation
- 1.2 Objective
- 1.3 Structure of Analysis
- 2 Business Process Offshoring
- 2.1 Definition of relevant terms
- 2.2 Organizational options
- 2.3 Main offshoring locations
- 3 Offshoring by banks
- 3.1 Drivers for market growth in business process offshoring
- 3.2 Benefits
- 3.2.1 Cost savings
- 3.2.2 Access to new talent pools
- 3.2.3 Market access
- 3.2.4 Process optimization
- 3.2.5 Further benefits
- 3.3 Risks
- 3.4 Potential business processes for offshoring
- 3.4.1 Criteria for selecting processes
- 3.4.2 Processes offshored by banks
- 3.5 Strategic options for banks
- 4 Specific challenges for offshoring banking processes from Switzerland
- 4.1 Legal restrictions to offshoring from Switzerland
- 4.2 Regulatory restrictions to offshoring from Switzerland
- 4.3 Potential strategies to deal with the legal and regulatory restrictions
- 4.4 Impact on reputation
- 4.5 Language barriers
- 5 Current status of business process offshoring by banks
- 5.1 Status of business process offshoring by banks globally
- 5.2 Status of business process offshoring by banks from Switzerland
- 5.2.1 Overall status of offshoring by banks from Switzerland
- 5.2.2 Offshoring at UBS
- 5.2.3 Offshoring at Credit Suisse
- 5.2.4 Offshoring at other banks
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
The primary objective of this paper is to provide an overview of the current status and trends in business process offshoring by banks, with a specific focus on offshoring from the Swiss banking market. A secondary objective is to introduce key issues in business process offshoring, including organizational options, suitable banking processes, offshoring locations, and the drivers, risks, and benefits involved.
- The current status and trends of business process offshoring by banks globally.
- The specific challenges and restrictions faced by Swiss banks in offshoring.
- The benefits and risks associated with offshoring banking processes.
- Criteria for selecting suitable banking processes for offshoring.
- Strategic options for banks regarding offshoring.
Zusammenfassung der Kapitel (Chapter Summaries)
Chapter 1: Introduction: This chapter introduces the context of business process offshoring in the global banking sector, highlighting the increasing competition and cost pressures driving this trend. It outlines the paper's objectives and structure.
Chapter 2: Business Process Offshoring: This chapter defines key terms related to offshoring and outsourcing, exploring different organizational options (captive, outsourced, hybrid) and key factors in selecting offshore locations.
Chapter 3: Offshoring by Banks: This chapter delves into the drivers, benefits, and risks of business process offshoring in the banking sector. It identifies criteria for selecting suitable processes for offshoring and discusses various strategic options available to banks.
Chapter 4: Specific Challenges for Offshoring Banking Processes from Switzerland: This chapter focuses on the unique legal and regulatory challenges faced by Swiss banks when offshoring, including banking secrecy and data protection laws. It proposes strategies to mitigate these challenges and discusses reputational and language barriers.
Chapter 5: Current Status of Business Process Offshoring by Banks: This chapter compares the offshoring activities of global banks with those of Swiss banks, specifically UBS and Credit Suisse, highlighting the significant lag in offshoring among Swiss institutions. It details the offshoring practices of UBS and Credit Suisse.
Schlüsselwörter (Keywords)
Business process offshoring, banking, Switzerland, UBS, Credit Suisse, outsourcing, captive offshoring, offshore outsourcing, legal restrictions, regulatory restrictions, data protection, banking secrecy, risk management, cost savings, talent acquisition, strategic options, global delivery model.
- Quote paper
- Alexander Beutler (Author), 2008, Offshoring of Business Processes by Banks from Switzerland, Munich, GRIN Verlag, https://www.grin.com/document/123469
