Although cost-cutting is usually the primary trigger for banks to move some business functions overseas, the move cannot be completely cost-free. A cost comparison between the home location and the overseas location will generally yield a positive result, but banks can cut their overseas costs even further by trying some of these approaches:

1. Eliminate Duplication, Consider Local Outsourcing

Investigate if any activities are being duplicated across multiple departments or verticals.

Are two or more departments performing functions that only one of them can do for both? Or can a separate support department perform this function for both departments? Are the activities driving value for the firm overseas or can they be outsourced to a local firm? Find answers to these questions and consider restructuring your overseas business to cut costs.

2. Use Non-Traditional Working Methods

Even in cheaper overseas locations, the costs of office rent, overheads and human resources (salaries, insurance, conveyance) can go out of control. In such cases, you might consider instituting a hub-and-spokes office arrangement, with the main office in one overseas location and the spokes in lower-cost locations . Another cost-cutting measure you might implement is telecommuting/work from home. Virtual and collaborative working technologies can enable people to access work resources from any location and save the firm costs associated with physical space.

.3. Make Cost-Reduction Strategic & Purposeful

In the world of business, the only constant is change, and one of the most common reactions to change is cost-cutting.

However, instead of cutting costs consider their long-term strategic needs first. Strategic cost reduction starts by identifying good costs and differentiating them from bad costs. Good costs are capabilities that drive profits and growth for the firm, while bad costs are non-essential spending areas.

The next step is to utilise as many resources as possible to make all strategically-critical good costs more effectively, and simultaneously devise methods to eliminate bad costs. The bottom line is that businesses need to think carefully before deciding which costs can be eliminated, reduced or even increased.

4. Technology Is Powerful – Use It

Research technological tools and figure out if you can use them to improve efficiencies and cut costs in your overseas functions. Don’t restrict yourself to tools used only in your industry – in the course of your research, you might discover a tool used in another industry that can help you in yours! Some examples of tools and technologies that you might consider in your cost-cutting endeavour are machine learning, robotics, artificial intelligence, predictive modelling, Blockchain and cognitive computing.