8 March 2010 | Rebecca Ellinor

Procurement is seizing its chance to make a mark in the financial services sector.

While the downturn has damaged the image of financial institutions, a tighter economic climate has provided an opportunity for purchasing to show what it can do.

That was the consensus of purchasing chiefs from banks and insurance companies who spoke to SM for a feature looking at the impact of the recession on their roles.

Ian Russell, integration director at Absa Group, said the sudden focus on cost turned procurement into an unusually valued part of the operation. “The more an organisation focuses on cost the more power and emphasis it places on procurement as a discipline to be able to bail the business out of the trouble it’s in, and we have seen that absolutely.”

“As the market changed the spotlight and the volume knob on procurement got turned way up,” said Stewart Hosford, who was head of sourcing operations at RBS until the beginning of this year, when he moved out of financial services. “We were asked to really step up again and do a lot more things more broadly than just in our traditional space.”

While procurement practice has grown increasingly sophisticated across most industries in recent years, the overall standard in financial services has lagged behind.

Beth Wallace, global head of procurement at RSA insurance group, said: “We’re rolling out sourcing and supplier relationship management into our emerging markets, which we wouldn’t have been able to do two or three years ago. And we’ve gone into areas of spend which we seriously hadn’t touched before, like marketing.”

“Purchasing in banks is at a tipping point,” Hosford said. “We have to stand up to be counted through this tough period, and if we do that then we create a whole new opportunity for ourselves to drive better sourcing in financial services. If we don’t, that’s it, and we’re never going to get an opportunity like this again.”

* The full feature will appear in the 18 March issue of SM.