25 June 2007 | Paul Snell
Offshoring saves the UK financial services industry £1.5 billion a year, according to a new report.
Global savings from offshoring have risen by £2 billion over the last 12 months, a study by professional services firm Deloitte found. Savings are now estimated at £4.5 billion worldwide, compared with £2.5 billion last year.
Around 75 per cent of financial institutions now have offshore capacity, compared with less than 10 per cent in 2001.
The increase in savings has been driven by more staff in low-cost countries. The study says financial services firms now have an average of 6 per cent of their total staff in such areas. India remains the primary location for offshore roles, but the report said China's share of labour was increasing. One third of firms now have offshored roles in China and the country will continue to compete with India over the next 10 years.
The report said it was important company boards had clear, long-term plans for offshoring, because otherwise improvements to efficiency would be difficult to achieve.