Trust Outsourcing Vendor? The Winner Chooses Wisely!

This decade will indeed be a challenging one for businesses throughout the financial services industry, characterized by a sustained pressure to reduce opertaional costs. As a result, the importance of cost-effective back-office activities, including accounting, financial administration and governance in Trust and Company Management operations is bigger than ever.

One way Banks, Trust companies and similar organizations can maximize the relationship value of providing Trust and Wealth Management services while minimizing costs is by strategically outsourcing various components of providing those services.

For trust companies and banks considering outsourcing their operations, the additional challenge of meeting the demands posed by an increasingly complex regulatory environment might just be the factor that helps validate their decision.

However, choosing the right outsource service provider, becomes a critical activity, for Trust companies and Banks. I have seen many instances of vendor selection based on an unstructured and cumbersome process. This can seriously hamper the long-term success of the outsourcing process. More importantly, the cost to both wealth managers and their clients can be steep, including not realizing the strategic benefits, significant disruption for the end-clients and lower-than-anticipated financial savings to the firm.

THE WINNER CHOOSES WISELY

First and foremost, a firm must understand its core value proposition and how it expects to benefit from outsourcing before it goes through the vetting process of choosing a provider.

Next, any dynamic and rapidly changing environment calls for flexibility in a service provider. Given that most outsourcing contracts are based on a long-term tenure ranging anywhere from 3 to 6 years, this flexibility becomes an important factor. While flexibility is a key factor in evaluating a service provider, it however, is not the only one. Trust firms should also look for agile and scalable servicing platforms, proven servicing relationships built entirely around clients’ operational needs, long-term financial strength and a history of compliance integrity. So, it is vitally important that a Trust company or Bank, takes into account all these factors and evaluates them in a systematic and detailed manner.

Similarly, while service models vary, trust firms should look for a relationship-based model geared toward their specific requirements. Some useful indicators include a provider’s feedback mechanisms, its systems for establishing employee goals and rewards, and a consultative approach to problem-solving.

The more successful outsourcing relationships represent long-term partnerships between a wealth management firm and its service provider. A selection process that takes this into account should reflect the consultative nature of outsourcing. A structured and systematic vendor selection process will ensure that you give a fair opportunity for this long-term partnership relationship to evolve, and this will ultimately ensure the success of the outsourcing decision.

For more information about our services please contact:

Hanno de Vriend
BPO Director
H.deVriend@amicorp.com

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BPO Sales Executive
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