Market outlook of outsourcing in the BFSI sector
Technavio’s market research analyst predicts the global outsourcing market in BFSI sector to grow at a CAGR of more than 6% during the forecast period. The need to conform to regulatory compliance is a key factor driving the growth of this market. The BFSI sector is witnessing massive regulatory changes, which has resulted in increased the demand for regulatory compliance and transparency in this sector. For instance, organizations in this sector need to comply with regulatory norms such as Basel III, Solvency II, HIPAA, the SOX Act, the US Patriot Act, and the Gramm-Leach-Bliley Act. Such global regulatory changes have led to increased capital requirements for banks and other financial services organizations, adding to their costs. Outsourcing makes it easier for companies to focus on their core competencies and also aids in managing the uncertainty caused by changing market regulations with minimal impact on the business. Outsourcing in this sector also helps organizations to reduce their operating costs, increase operational efficiency, and achieve a competitive advantage.
The reduction in cycle time obtained by outsourcing is another factor driving the market growth. Outsourcing of business processes in the capital markets of the BFSI sector has enabled multinational financial institutions to reduce their turnaround time through the adoption of lean business process models. Outsourcing service providers aid clients to achieve reduced turnaround time by adjusting time zones and shift patterns in such a way that the clients' problems are resolved before the start of their day. They also enable client organizations to meet the sudden increase in the demand by drawing on personnel from other cyclical industries such as housing, automobiles, and steel.
Competitive landscape and key vendors
The global outsourcing market in the BFSI sector is highly fragmented due to the presence of large and small players. The competition in this market is anticipated to intensify with more numbers of players entering the market space. Vendors in the market are constantly looking for ways to increase their market share through partnerships and strategic acquisitions. They are focusing on differentiating themselves by offering innovative, cost-effective, and outcome-based solutions such as business process as a service (BPaaS).
The leading vendors in the market are -
Other prominent vendors in the market 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, Softek, Sutherland Global Services, Syntel, Tech Mahindra, Unisys, Virtusa, Viteos Fund Services, Wipro, WNS, Xchanging, Xerox, and Zensar.
Segmentation by service and analysis of the outsourcing market in BFSI sector
In terms of outsourcing deals, the ITO segment led the market with a share of more than 88% during 2015. Organizations in the capital market are the major contributors to the global ITO market. The current fluctuating market scenarios have encouraged industries to adopt innovative technologies that enhance front-office, middle-office, and back-office operations. IT outsourcing enables insurance firms to adopt business models that reduce costs, enhance customer experience, and improve profitability. The growth in the number of digital customers, the need to improve business efficiency, increased regulatory compliance costs, and the competition from non-banking organizations in areas such as payments are some of the key factors fueling this segment’s growth.
Geographical segmentation and analysis of the outsourcing market in BFSI sector
During 2015, the Americas dominated the market, accounting for more than 45% of the market share. North America was one of the key contributors to the global outsourcing market in the BFSI sector. This is attributed to factors such as continuous regulatory and economic volatility challenges faced by financial organizations in the region. The US is the key leading country in this market as service providers in the US provide extensive support to financial services clients to meet their regulatory and financial requirements.
Key questions answered in the report include
- What will the market size and the growth rate be in 2020?
- What are the key factors driving the global outsourcing market in BFSI sector?
- What are the key market trends impacting the growth of the outsourcing market in BFSI sector?
- What are the challenges to market growth?
- Who are the key vendors in this market space?
- What are the market opportunities and threats faced by the vendors in the global outsourcing market in BFSI sector?
- What are the trending factors influencing the market shares of the Americas, APAC, and EMEA?
- What are the key outcomes of the five forces analysis of the outsourcing market in BFSI sector?
Technavio also offers customization on reports based on specific client requirement.
The global outsourcing market in the BFSI sector can be broadly classified into two major segments, which includes the information technology outsourcing (ITO) segment and the business process outsourcing (BPO) segment. Outsourcing enables the BFSI organizations to reduce costs involved in meeting tight regulatory and compliance requirements. Additionally, it also allows organizations to transfer their risks, improve customer services, achieve cost efficiencies, and gain competitive advantages.
This report is part of Technavio’s ICT research portfolio. This portfolio provides a comprehensive market analysis along with the market share, market sizing, and market segmentations covering areas such as automatic identification system, cloud computing, data center, enterprise application, IT security, ITO and BPO, and product lifecycle management. These market research reports provide a perspective on the various market opportunities and market threats along with the key trends that would influence the market growth during the forecast period. It presents insights into the changing competitive landscape and a detailed profiling and market analysis of the vendors. Also covered in the research are the key regions or countries that would have an impact on the market during the assessment years.
Table of Contents
PART 01: Executive summary
PART 02: Scope of the report
- Market overview
- Top-vendor offerings
PART 03: Market research methodology
- Research methodology
- Economic indicators
PART 04: Introduction
PART 05: Economic overview
PART 06: Market landscape
- Market overview
- Market size and forecast
- State of outsourcing deals by volume
- Five forces analysis
PART 07: Market segmentation by service
- Segmentation of global outsourcing market in BFSI sector by service
- PART 08: Geographical segmentation
- Global outsourcing market in BFSI sector by geography
PART 09: Market drivers
PART 10: Impact of drivers
PART 11: Market challenges
PART 12: Impact of drivers and challenges
PART 13: Market trends
PART 14: Vendor landscape
- Competitive scenario
- Major vendors
- Other prominent vendors
PART 15: Key vendor analysis
PART 16: Appendix
PART 17: Explore Technavio
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
- Manufacturers and suppliers
- Channel partners
- Industry experts
- Strategic decision makers
- Industry journals and periodicals
- Government data
- Financial reports of key industry players
- Historical data
- Press releases
- Collation of data
- Estimation of key figures
- Analysis of derived insights
- Triangulation with data models
- Reference against proprietary databases
- Corroboration with industry experts
- Market drivers
- Market challenges
- Market trends
- Five forces analysis
- Market size and forecast
- Market segmentation
- Geographical insights
- Competitive landscape