Boston, Bangalore, Beijing, Budapest, or Buffalo: The United States as a low-cost location and the implications for financial institutions

June 2009
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Boston, Bangalore, Beijing, Budapest, or Buffalo: The United States as a low-cost location and the implications for financial institutions

At a glance

Born in the USA? It could come to that as the United States emerges with greater allure as a potential low-cost sourcing destination..

Boston, Bangalore, Beijing, Budapest, or Buffalo: The United States as a low-cost location and the implications for financial institutions

Changing market conditions are shifting the preference for and suitability of sourcing locations. The U.S. is at its most favorable as a strategic destination, particularly for financial services institutions.  

Many traditional outsourcing locations have undergone profound macroeconomic and geopolitical change (e.g., wage inflation, currency appreciation/depreciation, political instability, and skills shortages), undercutting their longstanding dominance as market locations of choice for sourcing.  

In addition, the following are gaining prominence as factors in the selection of an offshore location:
  • Heightened awareness of geopolitical and privacy risks
  • Constraints on the low-cost model
  • Mixed client experiences with sourcing
  • Market conditions in the financial services industry and resulting government intervention
Together these factors make the U.S. an increasingly attractive location for sourcing.