INTRODUCTION

The Banking, Financial Services, and Insurance (BFSI) industry is one of the largest adopters of IT application outsourcing (AO) services. To cater to this large market segment, a number of service providers of varying scales and capabilities have developed capabilities to deliver AO services to BFSI companies.

As mature BFSI buyers seek to optimize their portfolio of AO services, they are signing larger contracts with a fewer number of service providers. As BFSI buyers drive further consolidation in the marketplace in response to their business requirements, the capability of service providers to undertake and deliver large-sized AO engagements has become a factor of prime importance.

In this research, we analyze the capabilities of 22 AO service providers serving the global banking sector. These providers have been mapped on Everest Group’s Performance | Experience | Ability | Knowledge (PEAK) Matrix, which is a composite index of a range of distinct metrics related to a provider’s capability and market success.

Scope of the analysis

• Industry: Banking (retail banking, wholesale banking, credit cards, loans and mortgages); excludes capital markets and insurance
• Services: Large (TCV >US$25 million), multi-year (>3 years), annuity-based applications outsourcing
• Geography: Global
• Service providers: 22 leading banking AO service providers

CONTENTS

This report is structured across three key sections, each containing insights on the banking AO service provider landscape, focusing on large-sized contracts:

• Banking AO service provider landscape: Analysis of individual service provider capability and service provider groups across the following dimensions:
  • Scale
  • Scope
  • Domain investments
  • Delivery footprint
  • Market success
• Banking AO PEAK characteristics: Analysis of each of the categories on the Everest PEAK Matrix - ‘Market Leaders’, ‘Major Contenders’, and ‘Emerging Players’
  • Commentary on capabilities of each service provider
  • Delivery capability characteristics (Scale, Scope, Domain investments, and Delivery footprint)
  • Market success characteristics (Transaction activity)
• Implications for key stakeholders: Implications of trends on buyers and service providers

Some of the findings in this report, among others, are:

• The service provider landscape for banking AO services comprises four major categories of providers - global majors, offshore majors, Tier-2 Indian providers, and regional players
• While global and offshore majors rely on their broader presence (across various geographies and serving multiple clients), Tier-2 Indian providers focus on growing their share within specific accounts. Regional players, expectedly, are successful in serving clients in target geographies
• Select global majors have established a portfolio of proprietary solutions and product partnerships; offshore majors are also expanding their banking solutions’ suites; regional and tier-2 Indian providers rely on partnerships with third party product vendors and have developed tools for specific AO sub-functions such as testing and compliance
• PEAK clusters’ characteristics: Leaders account for a majority of industry revenues from large banking AO deals and dominate transaction activity; Major Contenders have a stronger presence in select regions and verticals, where they offer significant competition to the Leaders. Emerging Players have focused on growing their business by developing deep relationships in specific accounts/clients
• The evolving service provider landscape in banking AO services provides a diverse set of options for banking majors and creates opportunities for unlocking value as contracts come up for renewal