ABA Banking Journal Competitiveness Survey 2008 - (Page S4) Outsourcing: Why “out” is “in” Exhibit 3 >Does your bank currently outsource any functions traditionally performed by staff? A >If yes has any of the outsourcing occurred within the last two years? Rural-suburban, and suburban banks have made this move more frequently than urban-suburban and urban banks. Yes 36.6% BY ASSET SIZE YES No 63.4% Under $100 million $101-$200 million $201-$500 million $501-$999 million $1 billion-up 32.4% 39 38.6 33.3 48.6 No 30.7% Yes 69.3% Exhibit 4 >If your bank outsources, what traditional bank staff functions does it outsource? Internal audit Loan review Compliance audit Item processing ATM 28.4% servicing 24.9% 19.4% Exhibit 5 mong the legends of banking is Amadeo Peter Giannini, the Italian-American banker who turned adversity into success beyond belief. In the aftermath of the San Francisco earthquake of 1906, Giannini rescued and then transported his bank’s cash to a safe spot. He then set up a makeshift temporary branch consisting of two barrels and a plank, so San Franciscans could borrow for rebuilding. The little Bank of Italy evolved through growth and merger into the namesake predecessor of today’s Bank of America. It’s hard to know if Giannini could have done what he did in 1906 under modern conditions. So much has changed—what people use banks for; what rules banks must abide by; the technology they must have at their fingertips—and at the fingertips of customers. Yet many community banks have come to realize that the most important thing they offer is personal banker-to-customer contact. 52.7% 48.8% 46.3% TOP PICKS FOR OUTSOURCING, REGIONALLY >If you outsourced, why did you do so? To cut costs To obtain expertise, but not in a full-time post 28.1% 5.9% Other *Banks could choose multiple answers. 60.1% 60.1% Top reason for banks over $1 billion Top reason for banks under $1 billion 44.8% Northeast Southeast Central Midwest Southwest West Internal audit Loan review Internal audit Compliance audit Internal audit Item processing To utilize talent we can no longer find in, or attract to, our market IT management Compliance Exhibit 6 18.4% ALCO reporting 17.4% Investment management 12.4% Training 11.9% Human >If you don’t outsource, are you actively considering doing so? resources Yes 23.6% BY ASSET SIZE YES No 76.4% 10% Marketing 6.5% Call center 9% Under $100 million $101-$200 million $201-$500 million $501-$999 million $1 billion-up 19.4% 25 20.2 33.3 41.2 Other *Banks could choose multiple answers. S4 MARCH 2008/ABA BANKING JOURNAL Competitiveness Survey 2008
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