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Technavio’s market research analyst predicts the global back office outsourcing market in the financial services sector to grow at a CAGR of around 7% by 2020. Back office outsourcing is a cost-effective arrangement that helps organizations to save up to 30% of its operational costs. This cost efficiency is achieved because the outsourcing companies help enterprises to manage routine responsibilities at very minimal costs, which in turn, reduces their overhead liabilities. Back office outsourcing companies offer several benefits to the financial institutions such as access to specific domain knowledge, best practices, new ideas, and high-quality talent for data-related services. With such quality outsourcing services, the organizations are able to deliver projects in lesser time and at affordable prices.
According to this market research report, an interesting back office outsourcing trend gaining traction in the market is the increased adoption of cloud computing and virtualization solutions among financial institutions. By implementing these services, financial institutions can outsource their IT infrastructures at reduced costs. Virtualization enables centralized deployment and management of virtual desktop environments to enhance safety measures for desktop access and data sharing over standard network infrastructures. Many players such as Kotak Mahindra life Insurance and Reliance General Insurance, have adopted Vmware-based virtualization solutions to improve the efficiency of their data centers, which will, in turn, reduce their overall infrastructural costs.
The services segment dominated the market in 2015 and accounted for around 54% of the total market share. Information technology outsourcing (ITO) and business process outsourcing (BPO) are the two major outsourced services under this segment, out of which ITO occupies around 89% of the overall market share. Factors such as the growing need for digital technologies to improve business efficiency, increased regulatory compliance costs, and competition from non-banking organizations in areas such as payments will fuel this segment’s growth during the forecast period.
During 2015, the Americas was the key revenue contributor and occupied around 47% of the overall market revenue. A rise in the number of outsourcing deals and implementation of various acts such as Dodd-Frank Act and HIPAA have necessitated financial institutions to outsource their business processes. Continuous regulatory and economic volatility issues faced by financial organizations will bolster this market’s growth prospects in the Americas.
This market is highly fragmented due to the presence of numerous large and small players. In this market, the vendors differentiate themselves by offering innovative, cost-effective, and outcome-based solutions such as BPaaS. Vendors are also increasing their profitability by implementing innovative solutions as per clients' requirement with flexible pricing, which helps organizations to address cost savings issues. Competition in the back office outsourcing solution market is expected to intensify with the entry of new players during the forecast period.
Key vendors in this market are -
The other prominent vendors in the back office outsourcing solution market in the financial services sector include Aegis, Attra Infotech, Birlasoft, Capgemini, CGI, Cognizant, CSC, Dell, eClerx, Endava, EPAM, EXL, HCL, Hexaware, HP, IGATE, Infosys, ITC Infotech, L&T Infotech, Luxoft, Mindtree, Mphasis, NIIT Technologies, Polaris Consulting and Services, Serco Global Services, Softtek, Sutherland Global Services, Syntel, Tech Mahindra, Unisys, Virtusa, Viteos Fund Services, Wipro, WNS, Xchanging, Xerox, and Zensar.
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PART 01: Executive summary
PART 02: Scope of the report
PART 03: Market research methodology
PART 04: Introduction
PART 05: Market landscape
PART 06: Market segmentation by category
PART 07: Geographical segmentation
PART 08: Market drivers
PART 09: Impact of drivers
PART 10: Market challenges
PART 11: Impact of drivers and challenges
PART 12: Market trends
PART 13: Vendor landscape
PART 14: Key vendor analysis
PART 15: Appendix
PART 16: Explore Technavio
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