Is it the fear of loss of control or is it fear of quality? The irony is, high operational costs and improving risk management are the most critical operational challenges faced by organizations due to recessionary pressure and recent regulatory changes across the globe. WNS conducted a recent survey with FSO Knowledge Exchange to re-assess the outsourcing models in the asset and investment management industry.
It hardly came as a surprise that the most frequently cited challenge was ‘Improving risk management’, selected by 90% of the respondents, followed by ‘Low operational efficiency’, which was selected by 78% of the respondents. Among the operational challenges faced by organizations, three key issues topped the charts: Operational scalability to manage varying volumes; enterprise-wide operational integration; and high operating costs.
Each issue highlighted, in my opinion, would find the right solution in outsourcing. The benefit lies in the opportunity to work with organizations skilled in managing specific business processes and, ultimately, the ability to deliver on projects, more efficiently and with better overall results. For example, WNS partners with a leading retail broker-dealer in the U.S. market, for which it provides investment and research tools. WNS scaled the operations rapidly assuming the delivery of 24 back office and voice processes ranging from low to high complexity within six months of the commencement of the engagement. Today, based on the delivery, the client has transitioned all its transactions to WNS. Click here to read the entire case study. The answer to operational scalability to manage varying volumes also has a perfect solution in outsourcing. For one of our clients, WNS bills the client on a Unit Transaction Pricing (UTP) model for a substantial portion of the scope. This allows for greater flexibility for the client as its business volumes fluctuate; for example, volumes can surge by as much as 30-40 percent during the tax season. This requires meticulous planning between both the client and the WNS team to manage fluctuating volumes.
The report also finds that operational re-engineering and developing in-house skills with a vision for continuous process enhancement fall under the internal-focused initiatives leveraged by organizations. Adopting a shared services model and outsourcing non-core activities to captive centers or third-party service providers are examples of external-focused initiatives. Watch out for the launch of the report on our Website on many interesting trends and solutions on outsourcing in the asset and investment management industry.
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