11    Outsourcing and the banking industry

Outsourcing may affect positively as well as negatively on organizations. When considering outsourcing, there are many things in the organizations that can be outsourced such as accounts functions, call center functions, recruitment, selection and training of the organization, administrative of payroll, marketing of the products, maintain the IT systems,  maintaining the ATMs of the organization, and internal audits (Ellram, 2001). 

When these areas are outsourced there are many benefits that can obtain by the organization. Management can focus on more important areas such as strategy development, core competencies, and setting up goals and objectives align with the vision and mission, etc (Kakabadse, 2005, March-April). Brand building and marketing of bank products to attract more customers. 

Technology in the banking sector is very important as well as very dynamic. Because of this dynamic environment, banks need to be more concerned about the technology, now they have. Moreover, to compete with other rivals in the banking sector, it is very useful to consider the technology they have and the changes in the technological industry in the world. 

Further, banks can concern about investments and utilization of funds (Keller, 2017). Most importantly they can eliminate the cost of hiring full-time employees and the waste of resources. Since these above-mentioned areas are outsourced, those areas are managed by the expertise and it may benefit the organization rather than recruiting employees by the bank.

Banks can think of customer satisfaction more and implement strategies to attract more customers. Not only advantages but also disadvantages are there when outsourcing different areas. When banks outsource their different activities, then banks should more concerned about from whom they get outsourced because if the vendor is not a high-quality organization, banks’ outsource areas’ output also not be in high quality and that will be a point to effects on the banks’ reputation.

Since this industry is very competitive, it is very important to make sure the quality of the vendor. In addition, when the quality is low, that means the vendor gives poor performance and it will badly affect on customers and especially, these affect when outsourcing the areas that deal with customers such as call centers are outsourced.