Financial Services Companies Failing to Perform Due Diligence on Outsourcing Deals

Although 46 percent of financial services executives view outsourcing as a way to achieve business transformation and a competitive edge, according to research from London-based PA Consulting, fewer than half (43 percent) of participants representing financial services companies reported that their firms undertake any form of due diligence when considering outsourcing partners. Further, 72 percent of financial services respondents wish they had increased focus on the ability of an outsourcing partner to deliver on promises at the outset of the deal.

As a result of the lack of due diligence, financial services companies are left with inadequate platforms on which to base medium- to long-term transformation objectives, says PA Consulting, leading to underachievement.

The survey included participants from 315 organizations, the largest portion of which (38 percent) were financial services firms. More than half of participating individuals were CIOs or IT managers; the rest were either in C-level or management positions. <<<