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 and variety of service providers 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. Further, as BFSI buyers drive further consolidation in response to their business requirements, the capability of service providers to undertake and deliver large-sized AO engagements becomes a factor of prime importance.

In this research, we analyze the capabilities of 21 leading AO service providers serving the global capital markets sector. These providers were 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 analysis

• Industry: Capital markets (investment banking, asset management, custody, fund administration, and brokerage); excludes banking and insurance
• Services: Large (TCV >US$25 million), multi-year (>three years), annuity-based application outsourcing
• Geography: Global
• Service providers: 21 leading capital markets AO service providers 

CONTENTS

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

• Capital markets 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
• Capital markets AO PEAK characteristics: Analysis of each of the categories on the Everest Group 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 capital markets AO services comprises four major categories of providers - global majors, offshore majors, Tier-2 Indian providers, and regional players
• While global and offshore majors bank 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
• Global and offshore majors have a relatively broader portfolio of proprietary solutions for capital markets, and a wider scope of services in terms of capital markets LoBs served and AO functions delivered; smaller service providers focus on building capability in select pockets of capital markets through targeted acquisitions
• PEAK clusters’ characteristics: Leaders account for a majority of industry revenues from large capital markets AO deals and dominate transaction activity; Major Contenders are augmenting their delivery capability through product partnerships and targeted acquisitions in this space; Emerging Players leverage their strength in customized application services and tailor their offerings to meet the specific requirements of capital markets AO buyers
• Capital market buyers and service providers need to align their strategies with the evolving market dynamics