Consulting Point observes that for more than a decade, Nordic banks have relied heavily on Indian IT providers to build and run their digital foundations. The rationale was clear: lower costs, access to large talent pools and scalable delivery models.
This approach has largely worked. However, shifting geopolitical dynamics and tighter European regulation are now exposing weaknesses that many banks can no longer ignore.
Geopolitics Enters the Technology Stack
India’s policy of strategic independence has become more visible in recent years. Closer engagement with Russia and China, combined with a reluctance to align fully with Western positions, has unsettled policymakers and investors across Europe.
For Nordic banks, this raises uncomfortable questions. When critical systems, data and development capabilities sit within suppliers operating under different political and legal pressures, outsourcing is no longer a purely commercial decision. It becomes a question of sovereignty, influence and long-term stability.
Regulation Raises the Stakes
Alongside geopolitical uncertainty, regulatory expectations have increased sharply. Frameworks such as NIS2 and DORA place clear demands on digital resilience, data localisation and exit readiness.
Banks must be able to demonstrate that critical systems and data can be relocated quickly and securely if suppliers, regions or jurisdictions become compromised. Long-term outsourcing arrangements that once offered scale can now limit flexibility and undermine regulatory compliance.
Operational Realities and Hidden Costs
Beyond global politics, operational challenges are becoming more visible. Consulting Point notes that high staff turnover within offshore delivery teams continues to erode continuity, institutional knowledge and quality.
These issues introduce hidden costs through delays, rework, compliance gaps and increased management overhead. As a result, selective insourcing and nearshoring are gaining traction across the Nordics, particularly where speed, control and intellectual property protection matter most.
Financial, Reputational and Governance Risk
Outsourcing decisions directly affect reputation, investor confidence and regulatory standing. Disruption caused by sanctions, political instability or supplier constraints could quickly expose banks to operational outages, compliance breaches and supervisory action.
Customer trust is also at stake. As public awareness of geopolitical alignment grows, banks must consider how supplier choices align with their brand, values and risk appetite.
What Bank Leaders Should Prioritise Now
Consulting Point believes banks should act before disruption forces reactive decisions. Key priorities include mapping dependencies on Indian suppliers, strengthening exit and migration plans, investing in local and EU-based capabilities, and enhancing governance and audit oversight.
The question facing Nordic banks is not whether geopolitical shocks will occur, but when. Those that reassess their outsourcing strategies now will be better positioned to protect resilience, compliance and trust. Waiting until disruption arrives may leave too little room to respond.