The growing competition in the banking sector has forced banks to outsource some of their activities in order to maintain their competitive edge. Our decision to outsource was mainly on cost considerations and also the lack of expertise in maintaining the whole gamut of services of ATM facilities. Outsourcing has become the latest mantra for companies to stay ahead of competitors in this highly competitive business environment. Banks too are not lagging behind in this latest mania. There has been a drastic change in the way banks operate in recent times.

The increasing competition in the banking sector has forced banks to protect their eroding margins by retaining their customers by providing value-added services through outsourcing. Outsourcing helps in attaining strategic objectives by reducing cost and increasing the efficiency through the unburdening of the non-core service activities. In effect, the outsourcing of banking activities is accelerating at a rapid pace. In order to have a competitive edge, banks have started outsourcing huge volumes of their non-core services. A recent study by Deloitte revealed that about $356 bn worth of US financial services will be outsourced to offshore locations in the coming years.