Are banks ripe for more outsourcing? You might think so given the cost pressures and the sheer level of consolidation that is underway. Over time, the industry has gotten much more accustomed to outsourcing even on a fairly large scale, so it wouldn't be a surprise if more banks were pondering their options.

Consultancy Pace Harmon suggests banks need to take some industry trends into account as they survey the field. For one thing, prices are heading north. Pricing was generous in 2009, but pent-up demand and other factors are switching the balance of power back to the suppliers. Some advice: Banks "should look for outsourcing providers that offer specific banking vertical expertise and avoid one-size-fits-all service offerings."

In addition, there's been a lot of consolidation in the supplier community. This "offers the ability to leverage additional products/services from suppliers or incorporate them in your favor in negotiations." You'll have to carefully evaluate your optimal number of suppliers. Less may be more at the infrastructure level, but, at the application level, a portfolio of suppliers may give you a certain leverage. 

For more:
- here's the advice 

Related Articles:
Citi to sell offshore outsourcing unit
Financial services firms outsourcing their security