Singapore Banks Outsource Functions Overseas to Save on Costs

by CFO Innovation Asia Staff, 20 July 2012

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topics:
Business Process Outsourcing Finance and Banking

tags:
accounts receivables banks offshoring outsourcing payroll

Three quarters of banks and finance companies in Singapore have embraced 'offshoring' and currently outsource parts of their operations overseas in order to achieve cost savings and to access talent not available locally.

A survey by Robert Half found that offshoring is widespread among companies in the banking and financial services sector regardless of size, with 91% of large firms, 74% of medium firms and 73% of small firms relocating some of their business functions from Singapore to another country.

The functions being sent offshore are predominantly the more transactional roles such as accounts payable and receivable, as well as payroll.

Deciding whether or not to outsource a particular business function is one of the critical decisions businesses of all sizes have to make.

According to the survey, the five functions most commonly outsourced overseas are accounts payable/ receivable management (43%); payroll (23%); billing and invoicing (22%); financial accounting (16%); and financial reporting (15%).

“Offshoring is now widespread in the banking and financial services industry due to the international scope of the industry and business," says Stella Tang, Director of Robert Half Singapore.

Tan explains that in Singapore, the drive to offshore comes from the need to keep costs down, as well as the inability to recruit staff to perform certain accounting and finance functions locally.

Singapore continues to act as a hub for the regional and global operations of many companies. Decision makers based in Singapore manage clusters of employees in a range of offshore locations. The various business functions these offshore functions perform are shared or exchanged between the countries where the company operates.

“The work sent overseas tends to be the transactional parts of the business, and therefore demand in Singapore remains high for skilled individuals with strategic and decision making experience,” says Tang.

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