Offshoring popular among Hong Kong banks

An Asia-wide survey of the financial services sector found that 63% of Hong Kong banks and financial companies believe offshoring effective.

The survey by finance and accounting specialist recruitment firm Robert Half also showed that four in five banks (81%) currently outsource parts of their operations overseas while nearly two-thirds (63%) said offshoring is an effective human resource (HR) strategy.

The survey included 550 senior business and finance leaders in Asia’s banking and financial services sector, including 150 respondents in Hong Kong. It also showed that 65% of small companies consider offshoring to be effective in their HR strategy when compared to 62% of medium firms and 55% of large companies.

Business functions in Hong Kong most commonly outsourced overseas are financial reporting (33%); financial accounting (29%); management reporting (22%); planning analysis (20%); accounts payable / receivable management (17%) and billing and invoicing (17%).

“We are witnessing an upward trend in offshoring amongst banks and financial companies in Hong Kong and Asia due to the increasingly globalised scope of the industry and business,” said Pallavi Anand, director at Robert Half Hong Kong.

Firms said offshoring increased organizational flexibility (36%); gave them access to skills not available internally (34%); reduced operating costs (26%); improved their ability to concentrate on core competencies (25%) and gave access to staff resources not available locally (24%).

“Ensuring the delivery of quality services and products and managing external risks in offshored countries are the main challenges when firms opt to outsource some of their functions overseas,” said Anand.

“Companies can strengthen quality assurance procedures, as well as reinforce risk management plans to minimize potential negative impacts and reap offshoring’s greatest rewards.”