Financial BPO occupies a huge market share of 40% of the total $40 billion global outsourcing market. Financial BPO offer Finance, Retail Banking, Commercial Banking and insurance services.
India, due to its educated talent pool, major cost-effectiveness and improved service levels is a key player in this segment. Research firm Everest Group mentions that the Financial BPO sector has a potential to grow to a size of $250 billion with India playing a key role.
Philippines and China are also major markets and Eastern Europe, Central America and South America are fast growing in the financial BPO sector.
Why India is a key player?
India is a home to a multitude of BPOs and some of the reason it has been chosen as an ideal destination is due to many reasons, one being the cost advantage.
The cost of labor, infrastructure as well as taxes and government regulations adds to the total cost of opening a center, and this has to be significantly lower.
Second feature is the availability of skilled individuals especially in the financial services sector. India has a large English speaking, finance-literate population, which makes it a great place for Financial BPOs.
Third, and the most important is, Government acceptance to setting up of BPOs. As compared to other nations India has been fairly open to the BPO culture.
BPOs have not only affected India’s GDP but also increased employability and purchasing power of people, contributing to a stronger and more sustainable economy.
Of the Financial BPOs, banking occupies 50% of the overall global total. Banking BPOs take up a lot of services like customer acquisition right from application processing, customer evaluation and verification, account opening, customer service as well as telemarketing activities.
They also handle all services related to accounts like credit cards, loans, payment processing etc. Back office transactions are a major role of the Banking BPOs where they work towards fraud mitigation; see to it that processes and policies are compliant, analyzing portfolios and custom development.
Financial BPOs are looking to grow majorly in the coming years.