How financial services are adapting to global outsourcing trends

In brief

• FS organizations are adopting hybrid GBS models that combine captive Global Capability Centers (GCCs) with strategic outsourcing to enhance operational efficiency and scalability.  
• FS firm face challenges, including service quality risks, cybersecurity exposure, talent attrition, cost pressures, and inefficiencies in legacy contracting models.
• GCCs, innovative outsourcing, and AI automation can help FS leaders to enhance resilience, achieve cost agility, and develop talent for AI-driven models.

Evolution of GBS and outsourcing in financial services (FS)

While captive GCCs and third-party outsourcing have historically underpinned FS operations for efficiency and scale, today's GBS models are increasingly hybrid and strategic.

Hybrid GBS models blend captive control through GCCs for critical functions such as risk, compliance, finance, and cybersecurity with outsourcing collaborations for scalable, non-core, or innovation-driven services.

According to 2024 EY Global Survey, 61% of organizations are committed to the GBS model, with 23% reporting that their GBS organizations are mature and scaling beyond transactional services. This trend is mirrored across leading FS firms, which are expanding their India-based centers with AI and analytics capabilities.

The COVID-19 pandemic accelerated the adoption of remote delivery, digital collaboration, and operational resilience measures, forcing FS organizations to rethink their outsourcing dependency and invest heavily in insourced digital capabilities.

The decision-making criteria for selecting outsourcing agencies have evolved. Beyond cost savings, FS firms increasingly prioritize innovation capacity, cultural fit, cybersecurity rigor, and the ability to contribute to long-term transformation goals. At the same time, the convergence of outsourcing and GBS models is enabling FS firms to enhance operating leverage while expanding the scope of value delivery.

Current challenges in the FS GBS environment

Despite strong momentum, FS organizations face critical challenges within their GBS transformation and outsourcing strategies:

• Service quality risk: Ensuring regulatory-grade service delivery across remote and hybrid global teams
• Cybersecurity exposure: Financial services firms are prime targets for cyber threats. SonicWall’s 2022 Cyber Threat Report noted a 105% year-over-year (YoY) increase in ransomware globally, a trend particularly impacting FS
• Talent attrition and scarcity: A global shortage of GenAI specialists, cyber risk experts, and regulatory operations leaders is straining FS firms’ ability to scale digital operations securely
• Cost pressures: Inflation and talent market volatility are reducing traditional outsourcing cost advantages
• Contracting inefficiencies: Legacy contracts based on full-time equivalent (FTE) or transaction volume metrics are poorly aligned to the need for innovation, resilience, and value-based outcomes

Strategies for overcoming challenges

Future-proofing FS global operations

By orchestrating the right blend of Global Capability Centers (GCCs) acting as insourced digital centers, innovation-driven outsourcing collaborations, and AI-led automation, FS leaders can:

• Enhance operational resilience under evolving regulatory regimes
• Achieve measurable gains in cost agility and service excellence
• Future-proof talent pipelines for emerging AI-driven operating models, including evolving employee value propositions to attract next generation talent
• Build a globally distributed delivery ecosystem capable of enabling leadership readiness and deeper enterprise alignment from within GCCs