Most financial institutions are not taking full advantage of the potential cost benefits of offshore outsourcing, according to a survey of global financial services companies by Deloitte Touche Tohmatsu (DTT). On average, survey respondents report that 3.5 percent of their global head count is based offshore. But, the most-effective offshore operations, DTT says, are those with 6.7 percent of their workforces located offshore. If all 62 surveyed companies were to offshore that portion of their head count, the collective annual cost base would be reduced by $16 billion, more than tripling the current reported savings of $5 billion, DTT contends.
Still, financial services executives estimate that by 2010 they will have moved 20 percent of their total cost base offshore, along with 10 percent to 20 percent of their employees.