In our rapidly changing financial and economic landscapes, financial research continues to be an indispensable part of decision-making processes within industries. It is an essential instrument to predict market trends, manage investment strategies and sustain competitive advantage. One of the ways industries, especially those in the financial sector, are taking advantage of this is through Financial Research Outsourcing (FRO).
What is Financial Research Outsourcing?
Financial Research Outsourcing involves handing over the financial research process or function to a third-party service provider. It is a strategic move made by companies to improve their research capabilities, reduce operating costs, and focus on core competencies. Examples of financial research services often outsourced include equity research, investment banking research, retail brokerages, and risk management.
Such a practice is becoming more mainstream due to the plethora of benefits it offers. According to a report by Technavio, the global research outsourcing market is expected to grow by $7.37 billion between 2020 and 2024, at a compound annual growth rate of more than 17%. This growth can be attributed to the increase in digital transformation and demand for cost-effective services in the financial sector.
Harnessing the Power of Financial Research Outsourcing
Cost-Saving Model
Outsourcing financial research enables businesses to save on costs significantly. Businesses can avoid full-time salaries, benefits, infrastructure, and other overhead expenses associated with maintaining an in-house research team. Furthermore, the responsibility of high-quality findings and data accuracy lies with the outsourcing partner, thereby reducing possible internal errors.
Access to Expertise
Working with a proficient outsourcing partner opens doors to a pool of experts with extensive industry-specific knowledge and advanced research tools. These seasoned professionals exhibit great skill and proficiency in handling complex financial data, ensuring accurate and reliable research findings.
Faster Turnaround Times
Financial Research Outsourcing considerably reduces the time frame for delivering research findings as timely information forms the crux of financial decisions. With the abolition of in-house research boundaries, the process becomes faster and more efficient.
Addressing Possible Concerns
Despite the outlined merits, some businesses may be hesitant to adopt the FRO model. There are questions around security and loss of control which are valid concerns. However, these concerns can be mitigated with due diligence and proper security measures.
Most outsourcing partners adopt stringent data security measures to protect sensitive financial data. They adhere to international standards such as the ISO/IEC 27001:2013 Information Security Management System. Moreover, technology advancements have made cloud storage and encrypted data transfers the norm, which ensures the highest level of data protection.
Also, it’s essential to note that despite outsourcing, the control of the research direction and the right to make decisions based on the research findings remains in-house. Outsourcing only changes the method of conducting research, not necessarily the authority over it.
Conclusion
The formidable combination of cost savings, access to top-tier talent, and speed are compelling arguments for Financial Research Outsourcing. With proven efficiency and improved productivity, it is increasingly becoming an integral part of strategic business decisions within the financial sector.
However, like any other business solution, the success of FRO depends significantly on choosing the right outsourcing partner. A partner who understands your business values, maintains high-quality standards, and most importantly, aligns with your business needs and objectives.
In conclusion, as we move towards a technology-driven future, Financial Research Outsourcing appears not only a strategic move but a necessary transition. Embrace the future, explore the potential of outsourcing today.