Outsourcing in banking: At a crossroads

New partnerships and solutions in view of growing challenges


Outsourcing is not new to European banks, but it has the potential to help them address some of the most pressing challenges in the sector today: cost and technological change. At its best, outsourcing can make banks more efficient and drive innovation in an increasingly competitive environment.

To understand the current dynamics and challenges in the financial services outsourcing market, we have conducted a survey across a broad range of European banks as well as established outsourcing providers working in the sector. The survey found that IT outsourcing is firmly established in parts of the business that are not differentiating and where scale effects are sizable, such as IT operations or infrastructure. Meanwhile, business process outsourcing (BPO) is less developed than in other industries, mainly due to lack of standardization or adequate service offerings from providers.

Going forward, our survey found that both IT and business process outsourcing will become more widespread and help banks deal with a combination of low interest rates, increased competition from both Big Tech and fintech players, and more regulation. The greatest potential for BPO is in areas where standardization is already high: payments, cards, security processing or consumer loans, according to the survey. Banks are increasingly turning to cloud-based as-a-Service models for both BPO and IT, although they are more hesitant in BPO. We expect that further standardization combined with digitization will further drive the level of use, as well as the variety of use cases, of outsourcing.

The key findings of our survey are

  • 30% of banks plan to switch their current outsourcing provider in the next five years
  • 75% of IT providers are building or plan to build an ecosystem by bundling services from different providers on one platform
  • 20% of banks plan to expand their use of as-a-service models in outsourcing

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Bank customers are becoming more digital, given in part the entry of new challengers offering online and app-based banking services. Outsourcing partners can help their clients develop new digital products and services with a faster time to market. Process automation has also accelerated the demand for outsourcing, as banks do not have the know-how or specialized resources offered by providers.

At the same time, low interest rates have depressed profitability and increased the pressure on banks to become more efficient. Outsourcing has therefore gained in relevance as an important cost-cutting tool. Banks and providers must also ensure they comply with the increasing number of regulatory requirements.

Meanwhile, fintech and Big Tech companies are competition for both banks and for outsourcing providers, as they develop innovative financial services. Finally, banks are tightening the ESG standards they require from all their suppliers, including outsourcing partners. Products and services need to be adapted accordingly.

Actions to take for banks and providers

The market for outsourcing financial services in Europe is changing fast as it adapts to the challenges facing European banks. Outsourcing providers can help banks in the following ways:

Outsourcing is key to making bank operations more efficient, particularly in standard processes that are not differentiating and benefit from economies of scale.

Outsourcing providers provide access to specialized resources and know-how in areas including automation, AI and data analytics, and enable banks to focus on their core competencies.

Bank customers are becoming more digitally oriented and outsourcing can provide new products and services with a faster time to market.


Strategic partnerships between banks and providers will help increase the benefits from outsourcing and give banks and providers alike a competitive edge over rivals. This is especially the case in the growing market for ecosystems and as-a-Service models.

To remain relevant in the long term, established providers need to be able to deliver innovative solutions in strategic partnerships that allow banks to focus on their core business. They must also consider how to deal with the increasing regulatory requirements for both banks and providers.

We recommend banks have a focused group of providers to rely on for their outsourcing needs. For that purpose, banks need a clear outsourcing strategy and to evaluate existing and new outsourcing relationships accordingly. Providers must ensure they have the right offering to meet banks’ demands and do their homework on the fulfillment of regulatory requirements and ESG considerations.


We conducted a survey across a broad field of universal, savings and specialized banks as well as established outsourcing providers. We engaged the full range of providers, from IT providers (e.g. software, infrastructure) to BPO providers. Overall, the field of participants covered 18 banks and 13 providers from Germany, Austria, Italy, the Netherlands, France, Belgium and Switzerland, allowing us to develop a comprehensive picture of the outsourcing landscape in financial services at a European level.

Contact us

Dr. Torsten Eistert

Dr. Torsten Eistert

Partner, Strategy& Germany

Jeroen Crijns

Jeroen Crijns

Partner, Strategy& Netherlands

Andreas Pratz

Andreas Pratz

Partner, Strategy& Germany

Hendrik Bremer

Hendrik Bremer

Senior Executive Advisor, Strategy& Austria