Financial KPO, or Knowledge Process Outsourcing, is a specific kind of BPO, or Business Process Outsourcing, that focuses on outsourcing skill components for a business process in a financial business. KPO is generally the art of outsourcing “knowledge work,” where skilled researchers or others with language, mathematical, or other knowledge based jobs apply externally, and are remotely managed by senior in-house staff. Various kinds of financial KPO have enabled some financial businesses to expand operations, leverage in-house knowledge resources, and streamline their business process.
Experts in the financial field have pointed out that a main goal of financial KPO is to free up senior staffers to focus on additional high-priority tasking that cannot be outsourced. Books from certain renowned journalists, in addition to new media reports, are showing that when something in a business environment can be outsourced, without excessive cost or complications, business leaders often choose to outsource it. This model theorizes that a business with a broader operations base gets additional “power” or capacity to do more things, such as brainstorm new products or services, or reach out to client markets.
Some recent reports have pointed out some of the challenges in both utilizing and providing financial KPO. Part of this is based on the difference between BPO, where generalized tasks are outsourced, and KPO, where the outsourcing is for analytical or high-level tasks that require “domain expertise” or “domain proficiency.” One of the obvious challenges is in getting quality recruits who can perform the higher level tasks, but this is by no means the only applicable challenge in pursuing financial KPO opportunities.
One of the fundamental issues with KPO is that the staff of the outside provider need to have intimate knowledge of the company outsourcing the work, including not just technical knowledge of tools and processes, but more “personal” knowledge of the platforms and content tools used within the company’s software architecture. This can and does raise security issues, as well as issues around non-compete contracts or the unauthorized use of company tools or data. This kind of concern can apply to almost any kind of business process outsourcing, but experts show that it is particularly essential to analyzing KPO relationships.
Despite the risks, financial KPO does offer a range of benefits for business that need to expand. One way that experts have explained this is that, with globalized financial knowledge process outsourcing, the company gets access to a much broader range of individuals with high level skill-sets, enabling the original firm to pick and choose the best minds from around the world. Businesses should look carefully at whether the benefits outweigh the risks for their particular setup.