In todays world of consolidation, convergence and competition, there is need for banks and financial institutions to outsource some of their non-core activities and concentrate more on their core activities in order to deliver quality services to the public. The most important reasons for banks outsourcing their activities are cost reduction, core concentration and infusion of technology.

In today's world of consolidation, convergence and competition banks and financial institutions need to be agile, adept and efficient all at the same time in order to be successful. Banks and financial institutions are upgrading themselves in the area of technology and other financial services in order to deliver better services to the customers. The banks and financial institutions that are doing this will remain in the market and rest of them will either collapse like pack of cards or become potential targets for acquisition.

Banks and financial institutions are not only concentrating on their core activities but also specializing more and more in them, leaving the non-core activities to outside vendors, who have achieved expertise and proficiency in those activities with economies of scale like technology, ATMs, network maintenance etc.

BPO stands for Business Process Outsourcing and is "the delegation of an intensive business process to an outside service provider, who owns, administers and manages it according to a defined set of metrics. It's where strategic value through outsourcing is created by creatively examining the process and changing the way it is processed".

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