Australian banks are saving a packet by employing offshore strategies, according to a Deloitte survey.
Moving business processes offshore is saving the financial services industry up to $9 billion per annum. This is up from estimated $5 billion in 2006 and $500 million in 2003.
More than half of the 36 financial institutions in eight countries surveyed in the Deloitte Global Financial Services Offshoring Report save more than 40 per cent against their onshore costs.
It included six out of the world's top 10 banks by market capitalisation.
"Australian companies are primarily offshoring to India, but some banks will be looking at leveraging their investments in China," Deloitte Financial Services lead partner Warren Green said.
Processes include IT services, back office functions and credit card processing. The industry is also accessing IT skills in India not available in Australia due to skill shortages.
The average number of staff employed offshore has increased from 150 to 2700 in four years. And one third of financial institutions now offshore processes to China, according to the report.
More than three quarters of the major financial institutions have offshore operations, compared to less than 10 per cent in 2001.
However, Green warned: "Offshoring is a complex strategy that requires detailed risk analysis.
"A significant complexity is in the transition and the cost in moving operations offshore. This cost can be overlooked and will have a significant impact on savings realised."
