PracticeConsultingBanks still shy away from outsourcing

Banks still shy away from outsourcing

Financial services institutions remain unconvinced of the cost benefits of outsourcing IT, according to a report by analyst Datamonitor.

The main concern was the loss of control to the outsourcing supplier, the report, ‘IT Efficiency in Financial Services: European Financial Services Technology Survey 2002’, found.

‘Outsourcers need to convince financial institutions that they are cost efficient, but the crucial factor in winning business will be demonstrating that they are more effective at enhancing products and services than in-house providers,’ said James Adams, technology analyst at Datamonitor.

The survey interviewed companies in retail banking, insurance and investment across Europe about their IT spending strategies for 2002, and found 32% of financial services companies would not even consider outsourcing.

The news comes despite reports that Barclays Bank is considering outsourcing its IT in a deal that could be worth around £100m.

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