Opinion and Analysis
ICT holds key to financial services outsourcing
Posted Monday, March 7 2011 at 00:00
Finance and accounting outsourcing is a relatively new in East Africa.
A number of outsourcing service providers are beginning to develop a track record of delivering a transactional finance processes.
Kenya is quickly becoming a lower cost destination. Additionally, Kenyan and other regional companies are increasingly setting sights on the East African market to grow cross-border businesses.
As a result, these companies are increasingly considering standardising and centralising their regional operations.
These changes indicate that the timing is ripe for moving aggressively toward delivering shared back office services.
This trend is also being observed in the government and the public sector, where significant investments.
The establishment of the Kenya ICT Board shows the government has recognised the need to improve back office efficiency.
The consolidation of finance processes in private sector to shared service centres is also gathering pace.
Many institutions in the private sector have established shared service centres or consolidated some element of their transaction processing.
PwC research shows the number of firms interested in shared services is increasing compared to last year.
But only a small portion of clients report that they have a discreet shared service centre operating independently with defined service level agreements.
The rest are pondering process standardisation. A good understanding of shared services is crucial and will be important information for financial service companies in the coming year.
The ongoing pressure to reduce heavy back office operations in the financial services industry means that executives are focused on improving efficiency and controls and simplifying business processes.
Sustaining this effort remains critical to realising value from the investments already made in process consolidation using advanced technology.
CEOs and CFOs continue to prioritise contributing to shareholder value.