American Express Bank (Amex Bank) is to establish facilities in the Philippines to provide back office processing for its global operations, including some trade services.

The US financial giant follows HSBC's lead in choosing the Philippines as a location for outsourced back office services.

Global hub

Amex Bank plans to outsource several functions to the Philippines including reconciliation, data control administration, letter of credit (L/C) outsourcing, foreign exchange and money market settlement.

The facility in the Philippines will be the bank's second global hub providing back office processing. Amex Bank already has an international operations centre in India.

Outsourcing trend

The Philippines Central Bank's policy-making Monetary Board has approved in principle the establishment of Amex Bank's back office facility in the Philippines, where the US financial institution already operates a savings bank.

Amex Bank is following the now established trend for banks to outsource back office processing and customer service functions to locations where running costs are lower and scale economies can be achieved through centralising routine business functions.

HSBC's Asian moves

Last October, HSBC revealed it was exporting 4,000 UK-based customer service jobs to locations across Asia.

The new centre in the Philippines will be HSBC's eighth service centre in Asia. Other centres are located in India, China and Malaysia. A company established within the HSBC Group called HSBC Electronic Data Processing will manage the Philippines office.

Advantages

Bank officials told a press briefing earlier this year why the Philippines makes an ideal location.

"High quality telecommunications infrastructure and excellent English-language skills are the building blocks of this business, and both are freely available in the Philippines," said HSBC Philippines chief executive officer Warner G N Manning.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.