Growing competition, economic slowdown and increasing business pressure have prompted many companies to look for new approaches, including outsourcing of financial services globally. This has provided an impetus to the financial research outsourcing (FRO) industry, which is largely driven by the banking and financial research services.
Financial research emerged as a high potential segment that picked up steam over the last few years. Most of the outsourcing firms handle financial research and analytics such as credit research, business valuation, investment research, equity research, financial analysis, among others. All these services play an important role in helping companies analyze their financial status, competition and make strategic business decisions. The benefits by outsourcing these services include:
- Decision Making: Outsourcing financial analysis services gives management access to faster and more accurate interpretation of financial data. This would result in quick decision making abilities as they have an easy access to the most important data of their company.
- Greater efficiency: Businesses that try to do everything themselves internally often end up paying a high price for better performance. This is because most companies, with the possible exception of very large corporations, aren’t set up with the cost structure or economies of scale to perform these tasks efficiently.
- Risk Identification: By outsourcing financial research service, companies can easily identify early warning signs or spot particularly profitable areas. Not having a system in place to analyze and organize financial data makes it impossible to effectively manage, grow and control a business.
- Better Technology: The outsourcing firms use superior technology which means the financial data can be used on regular basis to advance service levels of company. Moreover, they offer customizable solutions designed to fit the specific needs of small- to mid-sized businesses
- Skilled Workforce and Cost Savings: Financial research outsourcing offers up to 60 percent cost savings. The outsourcing companies employ dedicated financial professionals to achieve improved financial reporting and regulatory compliance with laws.
- Significant top-line and bottom-line impact from financial analytical insights into areas such as cost management, product profitability, inventory, and project appraisals, etc.
- Lower overhead: Doing it all internally requires lots of overhead- office space, salaries, benefits, etc. By outsourcing financial research services, companies can do way with hiring highly experienced financial research professions, renting an office space and retaining employees by offering perks and bonuses.
Outsourcing financial research services is a growing way used by many small and mid-sized companies to take care of their financial needs. It may appear risky at some extent but the outsource activity of this job is likely to bring successful and efficient results in real time. According to a research report, Global spending on finance and accounting business process outsourcing (F&A BPO) services will exceed US$25 billion in 2013 and rise at an annual compound growth rate of 8 percent through 2017.
Concluding Thoughts
In the right circumstances, financial research outsourcing can often save, rather than cost, money for growing businesses. The ability to focus on core competencies, increased efficiency, lower overhead, staffing flexibility, faster ramp-up for new projects, and a more level playing field with large competitors will help companies grow significantly. Business leaders who view financial research outsourcing as the most efficient and cost-effective way to perform certain business tasks may discover that it is the key to unlocking hidden profits and move their companies to the next level.
– Back Office Pro
