The Research on Financial Service Outsourcing Risk Management of Commercial Banks

In recent years, in order to improve core competitiveness, the financial institutions haveturned number of non-core business to outsourcing service providers,which shall be borne bythemselves, so the financial institutions can focus resources to achieve their strategic goals.Financial service outsourcing has been booming under this background. With theever-changing needs of the commercial banks themselves, and government departments’pushing in the field of outsourcing, financial service outsourcing of commercial banks got anunprecedented development. Financial Services Outsourcing has quickly become one of theimportant business strategy of commercial banks, because it can enhance corecompetitiveness, improve the efficiency of organization and avoid operation risk. Financialservice outsourcing is a double-edged sword, it brings benefits to the commercial banks alsobrings inevitable risk, so how to identify and control financial service outsourcing risk is animportant task to commercial bank policymakers.By combing the relevant literature, this paper regards commercial banks as the researchsubject, and systematically studies the financial service outsourcing risk of commercial banks.Firstly, this paper describes the basic theory of finance services outsourcing and its riskmanagement. Secondly, this article deeply studies the identification and measurement of riskfactors in financial service outsourcing process, and identifies risk factors from commercialbanks’ internal and external. The internal risk factors are summaried as: strategic risk,manpower risk, financial risk and management risk; the external risk summaried as: countryrisk, market risk, technology risk and credit risk. Then this paper uses risk matrix method andmultivariate AHP for risk measurement, respectively, from the analysis of the importance ofindividual risk factors and the overall risk. And on this basis this paper proposes riskprevention strategy based on internal governance and regulatory outsourcing. Finally, takingChina Everbright Bank’s information system outsourcing as an example. Through thequestionnaire survey of China Everbright Bank’s mid-level managers and outsourcing experts,this paper obtains the importance of individual risk factors and outsourcing overall riskseverity, and then proposes the corresponding risk control strategy according to the results ofthe evaluation.