INTRODUCTION

The Banking, Financial Services, and Insurance (BFSI) industry is one of the largest technology adopters. Economic turmoil, increasingly demanding customer profile, and regulatory pressures have created a challenging environment for banks. Further, the growing need to become customer-focused is driving the demand for analytics solutions.  Amidst this environment, banks increasingly realize the value they can unlock through evolved analytics capabilities.

On the supply side, evolution in technology and people expertise has enabled service providers to meet this growing need of banks and make previously inconceivable tasks possible. Service providers are enhancing their capabilities at a furious pace – primarily through acquisitions and alliances. In the analytics space, traditional IT/BPO service providers also need to contend against a new brand of competition, i.e. pure-play analytics service providers such as Mu Sigma and Fractal Analytics.

This report helps key stakeholders understand the market dynamics in order to realize best value. It helps the buyers understand the key considerations before adopting an analytics solution; the service providers benefit by understanding their peers’ competencies and how to approach the customer.

This report provides a comprehensive understanding of the analytics services industry with focus on the banking domain. Analytics adoption in the banking industry is covered in depth, exploring various aspects such as market size, key drivers, recent analytics initiatives, and challenges. The report also analyses the trends in analytics deals for various banking subverticals (cards, retail, commercial, and lending) and evaluates analytics capabilities of 20+ service providers in the banking space.

SCOPE

• Industry: Banking (retail banking, wholesale banking, credit cards, loans and mortgages); excludes capital markets and insurance
• Geography: Global
• Sourcing model: Third-party service providers (IT/BPO service providers, pure-play analytics service providers

CONTENTS

This report is structured into 4 key sections:

• Section I: Understanding analytics
  • Analytics and its building blocks
  • Levels of analytics
  • Analytics value chain
  • Analytics solution implementation – ITO model
  • Analytics solution implementation – BPO model
• Section II: Analytics in the banking industry
  • Drivers for analytics adoption in banking
  • Recent analytics initiatives of large banks
  • Challenges faced by banks in analytics implementation
• Section III: Analytics in banking: Market size and deal characteristics
  • Market size
  • Deal characteristics
• Section IV: Service provider landscape
  • Analytics service provider categories
  • Service provider capabilities by banking LoBs
  • Service provider investment in analytics – key themes
  • Recent initiatives and alliances of service providers for analytics offerings

Some of the key findings of the report include:

• Both IT and BPO service providers are at the forefront of providing analytics solutions, albeit with different models. While BPO players bring in the people expertise, IT service providers focus on the technology aspect of an analytics solution
• In the banking industry, analytics adoption is driven by various factors such as real-time response requirements, increasingly demanding customer profile, and regulatory pressures. Banks are primarily implementing analytics solutions for better marketing, increasing customer value, controlling customer churn, and fraud management
• The global analytics services market is estimated to be around US$XX billion (FY 2012) and growing at ~YY%. Of this, market for analytics services in the banking industry is estimated to be ~US$ZZ million (FY 2012)
• Analytics deals have primarily been announced by large-sized banks, however, adoption among small- and medium-sized banks is picking up
• While North America has traditionally dominated analytics implementations, APAC and EMEA have witnessed growing adoption of these solutions in the banking industry
• Banking analytics service providers can be classified into two broad groups – ITO/BPO service providers and pure-play analytics service providers. These service providers are most active in the retail banking and lending lines of business