At WiseGEEK, we're committed to delivering accurate, trustworthy information. Our expert-authored content is rigorously fact-checked and sourced from credible authorities. Discover how we uphold the highest standards in providing you with reliable knowledge.
Banking business process outsourcing (BPO) is a specialized field of BPO specifically for banks and lending institutions. It allows such companies to outsource many of their regular operations. Some of the jobs outsourced by banking BPO are account processing, customer acquisition, credit card and loan tracking, and fraud mitigation. This is done so core employees can work on high-priority matters, and so the bank can get the work done while saving money. Many back-office banking BPO businesses can add extra benefits, such as complex data mining and lead generation, to make outsourcing business more lucrative for the bank.
When a bank grows, it needs more employees to handle the extra work of handling loans and processing deposits. Hiring new employees will ease the extra workload, but outsourcing the work is much more cost-effective. By using banking BPO, banks are able to take daily functions and pass them off to a BPO business.
There are several reasons, aside from cost, why a bank would want to use outsourcing. This frees up employees so they can work on getting new customers, tracking important data, focusing on collecting credit card debt and helping customers. Banks will not have to worry about building new centers to house employees, because the BPO business will take care of that arrangement and the bank can focus on building the bank itself, not buildings.
Tasks delegated to banking BPO companies are often daily tasks that are simple to do but take many hours away from more important work. Account processing, such as credit cards and bank deposits, will be delegated to this type of company. Customer acquisitions, in the form of telemarketing and underwriting, also are commonly pushed on BPO services.
Another large task for which banks use BPO services is manning call centers. These are areas where many employees are called by, or call, customers to address complaints. Other functions associated with call centers are calling customers to open new credit accounts or to inquire about late payments. Most banking BPO services offer call centers, because they are highly popular with banking institutions.
Aside from handling routine tasks, banking BPO businesses offer special benefits to entice banks. For example, a BPO service may be able to perform data mining, lead generation and product sales to increase the overall profit of the bank. Banks often look for BPO service establishments like this, because this helps the bank make money and cut costs.