It’s not news to anyone that we live in an increasingly globalised world, particularly when it comes to financial services. We are reminded about this on an almost daily basis, particularly following the onset of the financial crisis with events in Athens for instance, sending regular shockwaves around the globe. An international financial services sector that is so closely intertwined has exacerbated the effects of the crisis, with increasing volatility and competiveness making the market a much tougher place. However, it does open the way to a number of opportunities for firms to overhaul and perfect their business models in order to emerge from the downturn in a prominent position on the global stage. One such opportunity lies in product standardisation, with third parties able to streamline the development process of financial products, allowing organisations to launch them in various markets across different geographies at ease and at a lower expense.

There are two key factors to consider here. The first element to take into account is a standardisation of the global marketplace itself. The explosive growth of a new middle class in emerging countries, particularly in the BRIC nations, means that consumers in the developing world now have a similar purchasing power and financial needs as those in developed markets. If this is the case, then why should those markets not be given a similar options when it comes to financial products? After all we all we all have similar worries and plans and so we want insure our possessions or save for our retirement wherever we are in the world. Such a need highlights the potential that a standardisation of product development holds for firms looking to maximise efficiency and global reach whilst minimising time and cost.

Secondly, regulatory bodies have been quick to recognise the need and potential for a global standardisation of rules and guidelines. Although financial markets will always need regulation tailored to their specific conditions, we have seen a drive by bodies such as the UK’s FSA and international equivalents to homogenise their guidelines as much as possible. The European Banking Authority (EBA), for example, was set up last year to harmonise banking guidelines across the European Union and some US legislation, such as the Foreign Account Tax Compliance Act (FATCA), has a global jurisdiction. The development of financial products depends heavily on regulatory requirements and a partial standardisation of these paves the way for a more streamlined, unified process. This is where financial services firms can use an outsourcer to their full advantage. A third party will have the expertise and optimum systems in place to standardise the product development process as much as possible, which amounts to big time and money savings for organisations launching products in different markets.

The global marketplace is homogenising with regulation and demand being the principal drivers. By tapping into the international expertise third parties can offer, firms can increase the global impact of their products. Outsourcers are able to optimise the processes behind developing products and can act as a bridgehead to launch them quickly and efficiently on a shared risk model. For good or bad, the financial services sector should embrace the integrated international market as it really is too big an opportunity to miss.

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