Cooperative Sourcing in the Banking Industry


The aim of this chapter is to provide insights into the chosen application domain and to clarify the motivation behind selecting cooperative sourcing behavior in the banking industry.


Banking Industry Saving Bank Small Bank Consumer Credit Business Function 
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  1. 40.
    It should be noted that this term — especially in the German literature — is also used for describing a particular set of customer services, such as cash management, depot services, credit lines, securities services etc. These retail services can of course be supported or completely executed by a transaction bank; nevertheless the term describes a subset of the retail banking business (Lamberti and Pöhler 2004, 6).Google Scholar
  2. 59.
    Defined by consulting firms as a market share of more than 30% of the total domestic processing volume being cooperatively sourced (Focke et al. 2004)Google Scholar
  3. 62.
    Credit factories are defined as transaction banks or processors which focus on the credit business. Their services portfolio usually includes parts of the loan granting (check of creditworthiness, check of collaterals, documentation, outpayment), loan processing and administration, permanent monitoring, and handling of non-performing loans (Ade and Moormann 2004, 158).Google Scholar
  4. 63.
    Result of one of our own case studies, which is partially documented in (Wagner et al. 2006, Beimborn et al. 2007a), cf. section 3.6.Google Scholar
  5. 64.
    38 public savings banks, 34 credit cooperatives and 28 private banks + thrift institutions (n=100) were asked about the automation and standardization potential within their institution. In all sectors, around 65% of the participants agreed that there is potential in the corporate loans business (Mummert 2005, 6).Google Scholar
  6. 69.
    If other business functions are affected by outsourcing, section 25a (1) KWG must be taken into account (Lehnsdorf and Schneider 2002). This is particularly relevant for business activities listed in section 1 (3) of KWG (leasing, factoring, financial advising, etc.) (Frank 2004), cf. section 1.5.4.Google Scholar
  7. 71.
    A transfer of ownership exists when a business unit retains its original identity after being transferred to the insourcer firm (Clever 2004, 227). In contrast, a succession in function exists when no resources, personnel or customer bases are adopted. For more information, see (Mahr 2004).Google Scholar
  8. 82.
    formerly MaK — Minimum requirements for the credit business (BaFin 2002), now integrated into MaRisk.Google Scholar
  9. 98.
    As usual in ABC, in our process analysis, process costs have been defined as total costs over the loan life time. All direct and indirect costs for personnel, IT, material, calculatory write offs und rents are allocated to the different process steps based on a singular compensation key (e.g. handling time in each process step). Cf. (Joos-Sachse 2002, Nadig 2000) for the activity-based costing approach.Google Scholar
  10. 101.
    The work on hand is not explicitly concerned about credit risk costs because basically they play no major role in the outsourcing decision, as long as refinancing is not outsourced. In this case, risk costs would only be affected if the sourcing provider provided less effective risk monitoring, or if the bank’s overall risk of the credit portfolio would increase due to lower diversification opportunities. Risk costs primarily are of a calculatory nature (Hölzer 2004, 236; Platzer and Riess 2004, 162) since credit risks have to be covered by equity.Google Scholar
  11. 107.
    As reported by the Federal Statistical Office (FSO 2004), the average labor costs in the banking industry have been €56,693 in 2004. In one El, average labor costs for the credit department of a medium-sized public savings bank were reported to be around €50,884.Google Scholar
  12. 117.
    This analysis was published in the proceedings of the 11th Americas Conference on Information Systems in Omaha (NE), USA (Beimborn, Franke, and Weitzel 2005a).Google Scholar
  13. 118.
    In contrast to covariance-based approaches as e.g. LISREL, AMOS, or EQS, commonly used, e.g., in marketing science, sociology, or psychology, PLS has minimal requirements for measurement scales, residual distribution, and sample size (Chin 1998).Google Scholar
  14. 120.
    A threshold of.707 ensures that at least 50% of the indicator’s variance can be explained by the (latent) construct (Götz and Liehr-Gobbers 2004).Google Scholar

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© Betriebswirtschaftlicher Verlag Dr.Th. Gabler | GWV Fachverlage GmbH, Wiesbaden 2008

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