Outsourcing spend by UK financial services firms reached £769 million in 2016, an 11 per cent rise year-on-year, as businesses boosted investments in back-office transformation, according to the latest Arvato Outsourcing Index.

The research, compiled by business process outsourcing (BPO) provider Arvato and industry analyst Nelson Hall, revealed that spending on BPO contracts rose sharply across the sector last year with companies procuring outsourced services in policy services, HR and property and casualty claims processing.

The Index found that BPO agreements worth £621 million were signed across the sector in 2016, up 87 per cent on the previous 12 months.

The research revealed that the boost in back-office spending contributed to the rise in deal value agreed in the industry last year. Contracts signed by financial services firms accounted for 12 per cent of the overall UK outsourcing market in 2016, according to the findings. Only government (42 per cent) and telecoms and media (19 per cent) accounted for more spending.

Patrick Quinn, CEO of Arvato Financial Solutions UK & Ireland, said: “The financial services industry remains under pressure to transform, both in terms of improving services for customers and finding new cost savings.”


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“It’s clear from the research that a growing number of companies across the industry see outsourcing as a viable strategy to address these challenges through introducing new innovations and ways of working. There are some very positive signs for the sector’s health looking forward, with a high proportion of first-time outsourcing deals (57 per cent) procured last year.”

The Arvato UK Outsourcing Index is compiled by leading BPO and IT outsourcing research and analysis firm NelsonHall, in partnership with Arvato UK. The research is based on an analysis of all outsourcing contracts procured in the UK market during 2016.

Outsourcing deals worth a total of £6.2 billion were agreed in the UK last year.

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