President Obama is fond of saying that jobs in USA have been “bangalored” drawing an obvious reference to the fact that outsourcing provide cost savings and efficiency in operation leading the business entities to focus on their core activities. We are also witnessing a similar phenomenon in the banking sector with various activities especially technology related being outsourced to specialized entities.
Whilst this arrangement has served the industry well, it must be recognised that outsourcing does not result in abdication of providing efficient services to the customer nor should it result in dilution of risk management practices and standards including the concentration risk of relying on few specialised entities.