Banking and Financial Services Offshoring: From Transaction Processing to Analytics

With growth rates of 30 to 35%, India’s revenues from banking and financial services offshoring is likely to reach $6.5 billion by FY2011. However, this is still a fraction of the “offshoreable” market potential. Arun Jethmalani, CEO, ValueNotes says, “Growth in Indian offshore revenues from the BFS vertical will outpace overall BPO growth, driven by expansion into higher value services, especially research and analytics”.

Almost 50% of the world’s biggest banks in terms of asset size already have significant presence in India. The smaller, regional banks are also expected to take to offshoring in a big way in future. The need to manage increasingly complex global operations in a cost-effective manner, and added workload due to regulatory compliance such as SOX, Spitzer’s Settlement ruling and Basel II norms are major offshoring drivers.


The offshore vendor landscape is made up of:

 

  • Captives of MNC banks and financial institutions such as Morgan Stanley, JP Morgan, Goldman Sachs, Lehman Brothers,TSB Lloyds, Scope International

  • Among third party players are:

1. Large multi-service companies like Genpact, EXL Service, WNS;

2. Multi-service BPOs with IT parents such as Wipro BPO, Progeon, MphasiS BPO and iGate;

3. Large KPOs such as Evalueserve, OPI and Integreon

Large players and niche specialists are best positioned to exploit the large opportunity.

Ribhu Ranjan, ValueNotes analyst and co-author of the report expects that going forward, regional and mid-tier financial firms the world over will adopt a multi-location, multi-vendor offshoring model, signaling a preference for global sourcing.

The report provides an overview of the buyer scenario and an in-depth analysis of the Indian vendor space along with profiles of major industry players. The report is designed to help:

  • Banking and Financial Services firms looking to outsource/offshore
  • Outsourcing consultants to evaluate and compare the offerings of vendors
  • Banking and Financial Services vendors to assess their competitive environment
  • Venture Capital companies looking for investment opportunities
  • Researchers looking for detailed information on financial services offshoring

This study is based on secondary data as well as extensive interviews with key people at various BPOs (captive as well as third-party) in India.

If you cannot find what you are looking for, please get in touch with us at reports@valuenotes.co.in

 

To download a complimentary copy of the Report, please follow this link

Table Of Contents

1. Executive Summary
2. Scope
3. The Big Picture    
3.1 Financial Services Industry: Definition
3.2 The Global Financial Services Market
3.3 Business Processes
4. The Offshoring Perspective
4.1 BFS – Pioneers of Offshoring
4.2 Offshoring Drivers: Beyond Cost Arbitrage
4.3 Offshoring Preferences: Regional and Global Firms
4.4 India Remains the Favorite
5. Who is doing What?
5.1 The Matrix
6. Indian Vendor Analysis 
6.1 Vendor Segmentation
6.2 Funding Patterns for Third Party BPOs
6.3 Billing Rates
6.4 Current Positioning of Vendors
7. Trends, Insights & Projections
7.1 Best-of-breed Global Sourcing Will Increase
7.2 Leading to Hybrids Within Hybrids
7.3 Captives’ Will Remain So
7.4 M&A Activity Will Gain More Traction
7.5 Skill Availability Holds The Key
7.6 Estimated Growth in Offshoring for India
7.7 Research and Analytics to Witness Spectacular Growth
7.8 Employee Numbers up 350% in Five years
8. Company Profiles
24/7 Customer
Adventity
Amba Research
Copal Partners
EXL Service
Fractal Analytics
Genpact
IBM Daksh
ICICI OneSource
Inductis
KPIT Cummins GBS
MphasiS
OfficeTiger
Outsource Partners International
Progeon
Transworks
Wipro BPO
9. Directory
10. Research Methodology
11. About ValueNotes

Table Of Figures

Figure: 1 S&P 500 market capitalizations 2004
Figure: 2 Global financial services market by segment
Figure: 3 Geographical dispersion of the global market
Figure: 4 Global financial conglomerates
Figure: 5 Business processes
Figure: 6 Process sub-classifications
Figure: 7 Core services
Figure: 8 Financial services value chain
Figure: 9 The offshoring time-line
Figure: 10 Drivers: Now and Then
Figure: 11 Regulatory Drivers
Figure: 12 Regional Firms Prefer Regional Vendors
Figure: 13 Services outsourced across the vertical
Figure: 14 Components of research and analytics
Figure: 15  India SWOT analyses
Figure: 16 Wage comparisons in the financial services industry
Figure: 17 Preferred destinations for offshoring
Figure: 18 Comparison of offshore destinations
Figure: 19 Who-is-doing-what matrix
Figure: 20 IT offshoring by top 30 firms
Figure: 21 Percent of financial institutions offshoring different services to India
Figure: 22 Vendor Segmentation
Figure: 23 Captive centers in India
Figure: 24 Major players catering to the BFS vertical
Figure: 25 Services offered by third party players
Figure: 26 Number vs. employment amongst vendor types
Figure: 27 Comparison of the vendor models
Figure: 28 VCs – the prime funding source
Figure: 29 Funding received by major BPOs
Figure: 30 Average Billing Rates
Figure: 31 Research and analytics claim the most
Figure: 32 Third Party Vendor groups
Figure: 33 Niche-o-Meter: Measuring the BFS dominance
Figure: 34 SWOT analyses of Third party vendors
Figure: 35 Rating of Vendor Clusters
Figure: 36 Vendor life cycle
Figure: 37 Future strategic moves of the vendors
Figure: 38 The hybrid model
Figure: 39 Prominent M&A Deals
Figure: 40 $7.01 Billion Indian offshoring in 2011 at current levels
Figure: 41 Employee demand to increase four fold by 2011

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