Insourcing of Technology: Banks are getting it right

Technology is moving fast from “cost center” to “business / value center” In my article “Key Fintech Trends of 2018”, I had predicted that banks will start moving away from outsourcing of technology and will insource key areas like customer onboarding, omnichannel platform, analytics etc.

This has started happening across leading banks in India as well as Europe / US. DBS Bank / Kotak Mahindra Bank have clearly demonstrated the power of Digital for everyone to emulate. Most of the banks are now hiring engineers, data scientists, designer and blockchain experts across various levels. These teams are getting embedded into business teams and are driving unparalleled customer acquisition and servicing initiatives.


– Technology / Digital is the most powerful business enabler / differentiator in the market. This is core to bank’s business model and cannot be managed well by outsourcing. Most banks are still following old & antiquated strategy shared by leading consultants of “focusing on business i.e. sales / credit” and “outsourcing all cost units”.

– There is limited motivation for Technology Outsourcing partner to drive innovation / digital transformation for the bank. Most of these partners are focused on increasing their FTEs.

– Outsourced Technology Platforms / Products have to be customized far too much for creating business value. Effort of implementing / supporting these platforms may be far more than developing them internally.

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