{{no footnotes, date=October 2010 Banking business process outsourcing or banking BPO is a highly specialized sourcing strategy used by

bank A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Because ...

s and lending institutions to support the business acquisition and account servicing activities associated with the customer lending lifecycle. These specific BPO services are usually offered through multi-year service-level agreements for all or portions of the credit card lending,

consumer lending Credit (from Latin verb ''credit'', meaning "one believes") is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately (thereby generating a debt), ...

or commercial lending segments of the financial services market. Some larger financial services organizations choose to extend their sourcing strategy to include other outsourced services such as

ITO Ito may refer to: Places * Ito Island, an island of Milne Bay Province, Papua New Guinea * Ito Airport, an airport in the Democratic Republic of the Congo * Ito District, Wakayama, a district located in Wakayama Prefecture, Japan * Itō, Shizuok ...

systems and software, human resources outsourcing and benefits services, finance and accounting outsourcing (FAO) services, procurement or training outsourcing. Banking BPO services are typically defined by industry analysts, advisors and leaders in the sourcing industry, such as the set of discrete processes or transactional activities that support the lending lifecycle as follows: * New customer acquisition services include telemarketing activities, application processing,

underwriting Underwriting (UW) services are provided by some large financial institutions, such as banks, insurance companies and investment houses, whereby they guarantee payment in case of damage or financial loss and accept the financial risk for liabilit ...

, customer or merchant credit evaluation and verification, credit approval,

document processing Document processing is a field of research and a set of production processes aimed at making an analog document digital. Document processing does not simply aim to photograph or scan a document to obtain a digital image, but also to make it digital ...

, account opening and

customer care Customer service is the assistance and advice provided by a company to those people who buy or use its products or services. Each industry requires different levels of customer service, but in the end, the idea of a well-performed service is that ...

and on-boarding. * Account servicing processes for

credit cards A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the o ...

consumer loan Credit (from Latin verb ''credit'', meaning "one believes") is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately (thereby generating a debt), ...

s. These most commonly include payment processing systems and services, customer service or

call center A call centre ( Commonwealth spelling) or call center (American spelling; see spelling differences) is a managed capability that can be centralised or remote that is used for receiving or transmitting a large volume of enquiries by telephone. ...

support operations (voice, digital, email and mail services), product renewals, and loan disbursement; document management services such as printing and mailing of statements, networked printing and storage solutions;

collection Collection or Collections may refer to: * Cash collection, the function of an accounts receivable department * Collection (church), money donated by the congregation during a church service * Collection agency, agency to collect cash * Collectio ...

s, recoveries processing, default management, risk management and

foreclosure Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan. Formally, a mortg ...

. * Consumer and commercial lending post origination transaction processing services, such as check processing, clearance and settlement services,

remittance A remittance is a non-commercial transfer of money by a foreign worker, a member of a diaspora community, or a citizen with familial ties abroad, for household income in their home country or homeland. Money sent home by migrants competes wit ...

, and

records management Records management, also known as records and information management, is an organizational function devoted to the information management, management of information in an organization throughout its records life-cycle, life cycle, from the time of ...

. * Back office transaction process management for loans or credit card portfolios, including custody services,

fraud In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compens ...

mitigation and detection, regulatory and program

compliance Compliance can mean: Healthcare * Compliance (medicine), a patient's (or doctor's) adherence to a recommended course of treatment * Compliance (physiology), the tendency of a hollow organ to resist recoil toward its original dimensions (this is a ...

, portfolio

analytics Analytics is the systematic computational analysis of data or statistics. It is used for the discovery, interpretation, and communication of meaningful patterns in data. It also entails applying data patterns toward effective decision-making. It ...

, reporting, conversions, management of technology platforms, interface for customer data and custom development.

References

* Sourcing for Survival: What Impact is the Credit Crunch Having on Sourcing in the Financial Services Sector? Tony Rawlinson, Managing Director of EquaTerra’s Financial Services practice; https://web.archive.org/web/20110710200931/http://www.equaterra.com/_filelib/FileCabinet/News/EquaTerra_Article_Sourcing_for_Survival_Alternative_Investment_Review_2009.pdf? * Outsourcing IT and Business Processes: A Supervisory Primer http://www.newyorkfed.org/banking/outsource.html * Financial Services Offshoring: Moving Toward Fewer Captives and Global Cost Competitiveness, The Conference Board, May 2010; https://www.conference-board.org/publications/publicationdetail.cfm?publicationid=1767

External links

* Outsourcing in Financial Services; http://www.bis.org/publ/joint12.html * Financial and Banking Sector BPO; https://www.ncri.com/

Outsourcing Outsourcing is an agreement in which one company hires another company to be responsible for a planned or existing activity which otherwise is or could be carried out internally, i.e. in-house, and sometimes involves transferring employees and ...

Business terms Information technology management Outsourcing