Financial-services organizations take a short-term view of their sourcing plans, and may not adequately measure the benefits and risks due to sourcing, according to a KPMG study titled Future sourcing: Evaluating the risks and benefits of sourcing (See Chart 3). The study involved a survey of 100 board-level executives from the financial-services sector.

The survey also indicates that many financial-services organizations do not adequately track the risks and benefits of global sourcing strategies. Almost 37% of respondents stated that their organizations do not measure regulatory risk; 35% said they did not measure technology risk; 40% said they did not measure reputation risk and 30% said they did not measure strategic risk. Perhaps, this explains why financial-services firms are taking a short-term view of their sourcing strategies (See Chart 4).

Moreover, almost 86% of the financial-services organizations polled prefer to outsource internal and customer-facing processes within their own country rather than offshore. Only 13% said that their sourcing activity is done outside their home country.

Significantly, buyers are generally not put off by the knowledge that their bank or insurer has outsourced some of its processes.