Only 30 percent of banks surveyed by Accenture in September 2002 reported measuring or tracking the efficiency of their finance and accounting operations. Thus, as an area of operations that is not aggressively measured for performance, finance and accounting could emerge as a strong candidate for outsourcing, the survey suggests.

"Outsourcing is an excellent vehicle to help banks rationalize redundancies, improve automation, exploit low-cost location processing, and implement a variable cost structure within their finance and accounting functions," said John O'Connor, a partner in Accenture's Financial Services operating group who specializes in finance and performance management. "A well-conceived outsourcing program can also enable scarce finance talent to be re-directed toward more value-added services for the business and away from the large amount of non-differentiated transaction processing that occurs in a typical accounting department," he added.

Two-thirds of executives who reported that their banks outsource said they expect outsourcing activity at their companies to remain at current levels over the next 12 months, while 20 percent said they expect to increase the level of outsourcing during that time.

One reason banks hesitate to outsource, according to 30 percent of respondents, is the fear that the bank will lose control over key business functions.

The survey identified several key attributes that banks look for in an outsourcing partner, including an ability to demonstrate cost savings, sensitivity to the bank's needs and corporate culture, and a proven track record, with substantial financial services industry knowledge and experience.