Analysis of Outsourcing Activities in the Banking Industry in Nigeria: The Rationale and Perceived Benefits

Abstract

This study examined rationale and benefits for outsourcing in Nigerian banking industry. The study utilized primary data which were collected through questionnaire and key informant interviews. The data collected were analysed using descriptive and inferential statistical techniques. The paper found that security, cleaning, recruitment, training, human resources and ATM are the most outsourced services in the Nigerian Banking Industry. The study however revealed that, technical convenience and efficiency, increased productivity/performance, the need to focus on core activities, Improvement of service delivery and quality, as well as to meet changing customers’ needs are the major rationale for outsourcing in Nigerian banking industry. In addition, the study concluded that increased flexibility, growth of banks and increased services are the major benefits of outsourcing in the Nigerian Banking Industry. The study however concluded that, poor suppliers’ problem, reputation damage and poor expertise delivery are the major risk which the banking industry are confronted with whenever they outsource their activities.

Keywords: Outsourcing benefits, strategic management, Nigerian banks,

DOI: 10.7176/EJBM/12-23-04

Publication date:August 31^st 2020