Niyamath Parveez

One thing that the recent economic instability has caused is a larger degree of mistrust or displeasure at the banks. It appears that the banks around the world are being viewed as the cause for the recession ad the relationship between client and bank has changed extensively in the past year. Whether the relationship is able to be rebuilt is unclear but there is no doubt that the banking institution and industry has a lot of work to do to get people onside once more.

This means that bank managers and industry bosses will have to spend more time contemplating what decisions they should take. Previously, the financial bottom line would have been the only issue of note for the industry to worry about. Pursuing profits is not unreasonable for any firm to attempt but give the impact it has caused the world, there will be many who believe a bank should behave in this manner. Therefore, any decision now made by a bank has to be balanced against a number of other issues.

This can be seen in the way that the Bank of Tanzania (BoT) has changed its attitude towards outsourcing as a solution to their labor costs and problems. Outsourcing is one of the most effective ways for any company to become more efficient and effective with respect to their daily activities. There are many different tasks that a banking institution can perform through utilising outsourcing, hence why it has been so popular in recent times. That has changed though with the massive swing in public perception towards the bank. The money grabbing and cost cutting behavior which was not a concern to the public in the past has now become a major political issue for people all around the world. All of which means firms have to be give more deliberation to what they undertake.

BoT has decided to enforce restrictions on the number of banking companies and financial institutions throughout the country. This move has been taken to improve the stability of the banking industry and financial systems. Considering the impact the world economy will have on smaller nations, being able to implement matters such as these are vital to ensure any disruption is minimized. A change in attitude for the banking industry is sure to be seen as a good way of increasing consumer confidence in the system, hopefully making it less of a “them and us” situation, which currently prevails.

A change in the way that firms manage and regulate themselves will also lead to more management involvement, which will hopefully improve the level of management practises. There is no doubt that outsourcing brings a great deal of benefits to a company but it can lead to a loss of skills or knowledge. Placing a block on outsourcing will enable all management levels to reconnect with their business and hopefully their consumer base. The long term benefit by the BoT moves may not please those that are pro outsourcing but for the greater good of the local economy, this decision should be greeted with quiet optimism.