F&A Outsourcing Offers Revenue Opportunity for Banks

While the popularity of offshoring is growing in mostcapabilities, a Fifth Third SVP says, "For us to develop
business sectors, retail banking appears to be athe technology and the subject matter expertise, we
notable exception. According to a Datamonitor survey,were losing vital time."
just 18 percent of retail banks had outsourced any ofEmerging technologies such as Web-based portals
their business processes offshore, although 40 percentmake it far easier for banks to forge these types of
had used outsourcing.  This article reveals somepartnerships, the Celent analyst tells Bank Systems &
differing results.Technology.
When we've mentioned banks here in the past,Through their strong brands and existing relationships
it’s been about their activities as consumers ofwith commercial customers, banks offer outsourcing
outsourcing services, including their apparent reticenceproviders a shot at business they might not otherwise
in working with offshore providers.have a chance of winning. Banks can enhance those
A recent article in Bank Systems & Technology offerscustomer relationships by offering a new service.
an interesting twist, quoting a Celent analyst whoBanks will also make a little money - though Celent
believes banks could earn a little outsourcing revenuepoints out it's a relatively modest revenue opportunity,
of their own by partnering with third-party firms thatcurrently a $300 million annual business that could grow
provide accounts payable and accounts receivableto $1.6 billion. But unlike bigger money businesses like
services and selling them to their commercial cashmortgages, it's nice and stable.
management customers.A few banks have even purchased invoice solutions
That's exactly what Cincinnati's Fifth Third is doing, withproviders, the article notes, mentioning Mellon's
a partnership with invoice solutions provider APIacquisition of SourceNet Solutions.
Outsourcing. It didn't make sense to build internal