According to estimates by the Polish Bank Association, 75.9% of banks in Poland use outsourcing and a further 13.8% plan to commission certain activities to external entities. Current legal conditions in Poland make it difficult for banks to use outsourcing. From this year on, the possibility of using such services became even more complicated.
Current problems
Bank outsourcing is an instrument by which the bank (outsourcer) commissions banking activities to be performed by "external" entities not belonging to the bank's organisational structure (insourcers). It facilitates the activities of financial institutions, making processes easier and reducing costs. By outsourcing some of its own activities, the bank can focus more on its core business from the point of view of strategy, specialisation and experience, or influence on financial results. The experience of cooperation among banks and entrepreneurs based on the currently applicable provisions of the Banking Law points to the need to change the current regulations.
Entrepreneurs commissioned by the bank to perform certain activities often find it necessary to use the services of other entrepreneurs. But the current provisions do not include the concept of sub-outsourcing. Furthermore, in an event of force majeure, an entrepreneur, as a party to the agreement concluded with a bank, cannot commission a single activity to another entrepreneur.
Further complications arise in practice due to the separate regulation of so-called foreign outsourcing. If a bank wants to conclude an outsourcing agreement with a foreign entrepreneur not based in an EU member state or an agreement on performance of certain activities permanently or temporarily abroad, it requires a permit from the Financial Supervision Authority. The argument in favour of changing the above regulation is the need to remove doubtful interpretations arising out of the current wording, suggesting that a permit from the Financial Supervision Authority is required in order to conclude an agreement under which the activities to be outsourced may be performed abroad in a member state of the EU. The current interpretation is contrary to Arts. 43 and 49 of the European Union Treaty, which establish the principle of freedom to conduct business and perform services.
Banks are also obliged to provide information to the Financial Supervision Authority. This obligation is extremely restrictive because banks are always obliged to notify the Financial Supervision Authority of their intention to conclude an outsourcing agreement at least 14 days in advance. Under the currently applicable provisions of the Banking Law, the obligations to report the conclusion of an outsourcing agreement are too broad, in particular reporting obligations which de facto create an additional and unnecessary administrative requirement for entities involved in outsourcing activities.
Proposed amendments
Because of the above, an amendment to the Banking Laws proposed by the Polish government is very welcome. On 19 April 2010, the Ministry of Finance adopted a bill to amend the Banking Law in terms of regulations of bank outsourcing. The proposed amendments include inter alia an extension of the statutory catalogue of activities which may be entrusted to an entrepreneur or foreign entrepreneur without a permit from the Financial Supervision Authority. The bill also introduces sub-outsourcing, which will enable entrepreneurs or foreign entrepreneurs who are party to an agreement with a bank to commission certain activities to another entrepreneur or foreign entrepreneur after meeting additional requirements.
Two cases of sub-outsourcing are currently planned. The first would be to commission activities aimed at achieving the main purpose of the agreement. The second would be to commission the activity on a temporary and one-off basis when the insourcer cannot perform the activity itself due to force majeure. Another proposed amendment would exclude from so-called foreign outsourcing agreements ensuring that entrusted activities are performed abroad in the territory of an EU member state.
The abovementioned proposed amendments result from the intention to adjust outsourcing adequately to the needs of the trade. However, there is no need to adjust local regulations to the community regulations. Bank outsourcing has not yet been regulated by binding acts of community law. Member states will remain responsible for regulating bank outsourcing, the scope of this regulation and specific solutions.
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