Turbulent times force financial services to rethink strategy

Unpredictable and unstable markets will see more financial services companies experiencing benefits by outsourcing their systems or services during 2008, predicts Newcastle Building Society.

The Society experienced significant year on year growth of its own outsourcing business. Newcastle Strategic Solutions (NSSL), established in 1997, saw assets under management rise from £5.3bn to £10.5bn. Growth has continued steadily in 2008, with a notable increase in the number of new customers outsourcing for the first time.

An increasing number of companies outsourcing for cost-cutting reasons is likely to be an area of growth for providers if economic problems dominate companies' plans in 2008, according to the Butler Group Review, February 2008.

Colin Greaves, Managing Director, Newcastle Strategic Solutions Limited believes that the ‘credit crunch' will not only emphasise the importance of diverse funding strategies in the savings and mortgage market, but also create an opportunity to address broader issues such as the mounting pressure on costs and tightening margins. Outsourcing is a commercially savvy option - according to a recent survey by Capgemini, almost 75% of IT leaders said that outsourcing has a positive impact, allowing them to focus on innovation.

Colin Greaves said: "2007 was the year the global nature of economic issues and the impact they can have on our economy began to be realised by both businesses and the public. Our Solutions business expanded beyond our expectations in 2007 in terms of customer acquisitions and business volumes. We are now being approached by those thinking of outsourcing for the first time, who are being forced to rethink their strategies in the current climate.

"Newcastle Building Society offers high speed access to both technology and support staff, something that, unless it has been high on the internal agenda for some time, is not always available to firms. Our ability to facilitate a company's launch to market with a new distribution channel such as the internet presents a tactical solution to strategic issues that may be of concern to organisations in the forthcoming months.

"Perhaps the greatest achievement has been the consequential significant growth in the workforce and the expansion into our new processing centre where we anticipate creating 500 additional jobs by 2012."

Newcastle Strategic Solutions launched to increase the innovative services of Newcastle Building Society, and now offers three distinct routes to outsourcing for savings, mortgages and systems as well as an innovative and market leading proposition for managed Debit and Prepaid cards.