Financial services companies accounted for more than half of UK outsourcing contracts in the first quarter of 2018, according to new research.
Outsourcing contracts worth £718 million were signed in the UK between January and March, with financial services and retail businesses the most active buyers, according to the Arvato UK Outsourcing Index.
The research, compiled by business outsourcing partner Arvato and industry analyst NelsonHall, found that deals worth £363 million were signed in the financial services sector during Q1 2018.
The main focus on spending was business process outsourcing, including customer service agreements and payment processing, along with IT contracts, particularly cloud computing.
The research found that spend on outsourcing deals between January and March fell 75% compared to the same period in 2017, which was a particularly strong year for outsourcing.
Debra Maxwell, CEO of CRM solutions for UK & Ireland at Arvato, said: “Following a strong year for UK outsourcing in 2017, we’ve seen a more subdued market in the first quarter.”
The unsettling impact of the EU’s General Data Protection Regulation and the ongoing Brexit negotiations were a factor, but Maxwell added: “Our findings show there remains strong appetite from businesses to work with outsourcing partners to bring in external expertise for key operational areas such as customer services, and to invest in maintaining a robust IT infrastructure.”
The private sector dominated the UK outsourcing market in Q1 as businesses accounted for 90% (£645 million) of the total value of contracts signed.
