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Analytics in banking   preview deck - june 2013
 

Analytics in banking preview deck - june 2013

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This report provides a comprehensive understanding of the analytics services industry with focus on banking domain. Analytics adoption in the banking industry is covered in depth, exploring various ...

This report provides a comprehensive understanding of the analytics services industry with focus on 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

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    Analytics in banking   preview deck - june 2013 Analytics in banking preview deck - june 2013 Presentation Transcript

    • Banking, Financial Services, and Insurance (BFSI) Outsourcing Market Report – June 2013 – Preview Deck Topic: Analytics in Banking: War is Ninety Percent Information1 Copyright © 2013, Everest Global, Inc. EGR-2013-11-PD-0888 1 War is ninety percent information. – Napoleon Bonaparte (1769-1821)
    • 2 Copyright © 2013, Everest Global, Inc. EGR-2013-11-PD-0888 Our research offerings for global services Subscription information  The full report is included in the following subscription(s) – BFSI ITO – BFSI BPO  In addition to published research, a subscription may include analyst inquiry, data cuts, and other services  If you want to learn whether your organization has a subscription agreement or request information on pricing and subscription options, please contact us: – info@everestgrp.com – +1-214-451-3110 Market Vista Global services tracking across functions, sourcing models, locations, and service providers – industry tracking reports also available Custom research capabilities  Benchmarking | Pricing, delivery model, skill portfolio  Peer analysis | Scope, sourcing models, locations  Locations | Cost, skills, sustainability, portfolio  Tracking services | Service providers, locations, risk  Other | Market intelligence, service provider capabilities, technologies Healthcare Information technology Finance & accounting Procurement Banking, financial services, insurance Global sourcing Cloud Vista Human resources Recruitment process Transaction Intelligence PricePoint Service provider Intelligence
    • 3 Copyright © 2013, Everest Global, Inc. EGR-2013-11-PD-0888 Background and scope Background of the research Increasing affordability / cost efficiency of storage systems coupled with the meteoric rise of Internet and social media in the last decade has led to creation and assimilation of humungous amounts of unstructured data. Organizations today, are on the lookout for means to effectively process this unstructured data to gather meaningful insights that can be leveraged for superior decision making. Managing and processing data which is emanating from a variety of sources, generated in multiple formats and is delivered at high velocity is a key priority for enterprises. For this purpose, companies across verticals are leveraging analytics for improving their data-management capabilities to better understand customer needs, streamline and automate processes, identify clandestine patterns, and make accurate forecasts The Banking, Financial Services, and Insurance (BFSI) industry is one of the largest adopters of analytics services. Economic turmoil, increasingly demanding customer profile, and regulatory pressures have created a challenging environment for banks. Further, heightened need of customer focus 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 this research, we analyse the current trends, key uses and broad service provider landscape for analytics services, specifically for the banking sector. We focus on:  Understanding analytics: key elements, processes, functions and deployment areas  Banking market size and key transaction characteristics  Key drivers, rends and activity for analytics in banking  Major service provider categories and capabilities Scope of this report  Industry: Banking (retail banking, wholesale banking, credit cards, loans, and mortgages); excludes capital markets and insurance  Services: Banking (industry-specific BP services), Banking-IT (application and infrastructure services)  Geography: Global
    • 4 Copyright © 2013, Everest Global, Inc. EGR-2013-11-PD-0888 Table of contents (page 1 of 2) Background and methodology 5 Summary of key messages 10 Section I: Understanding analytics 13  Summary 14  Analytics and its building blocks 15  Levels of analytics 16  Analytics value chain 17  Analytics solution implementation – ITO model 18  Analytics solution implementation – BPO model 19 Section II: Analytics in the banking industry 20  Summary 21  Drivers for analytics adoption in banking 22  Recent analytics initiatives of large banks 30  Challenges faced by banks in analytics implementation 32 Section III: Analytics in banking: Market size and deal characteristics 33  Summary 34  Market size 35  Deal characteristics 36 Topic Page no.
    • 5 Copyright © 2013, Everest Global, Inc. EGR-2013-11-PD-0888 Table of contents (page 2 of 2) Section IV: Service provider landscape 42  Summary 43  Analytics service provider categories 44  Service provider capabilities by banking LoBs 45  Service provider investment in analytics – key themes 46  Recent initiatives and alliances of service providers for analytics offerings 47 Section V: Implementing an analytics solution: Key steps / considerations (case study) 55 Section VI: Implications for key stakeholders 61  Implications for buyers 62  Implications for service providers 63 Appendix 64  Analytics-related M&A by service providers in the financial services space 65  Glossary of terms 67  BFSI research calendar 68  References 70 Topic Page no.
    • 6 Copyright © 2013, Everest Global, Inc. EGR-2013-11-PD-0888 Consistent with other research areas, our BFSI coverage is based on four pillars of strength to produce actionable and insightful research  Round the year tracking of all the service providers across ITO and BPO in BFSI  Dedicated team for ITO and BPO research, spread over two continents  20+ years of advising clients on ITO and BPO related decisions  Executive-level relationships with buyers, service providers, technology providers, and industry associations Robust definitions and frameworks 1 Primary sources of information 2 Diverse set of market touch-points 3 Fact-based research 4  Market thought leadership  Actionable and insightful research  Syndicated and custom research deliverables Impact on value proposition to market Impact on efficiency or effectiveness of process Impact on cost of process Low High High Low Strategic focus Processexpertise Domain expertise 1x 0.1x 10x Services Industry Service Enablers Service ProvidersEnterprises
    • 7 Copyright © 2013, Everest Global, Inc. EGR-2013-11-PD-0888 This report is based on two key sources of proprietary information  Proprietary database of 250+ Banking BPO contracts and 300+ Banking ITO contracts (updated annually)  The database tracks the following elements of each contract: – Buyer details including size and signing region – Contract details including service provider, contract type, TCV and ACV, service provider FTEs, start and end dates, duration, and delivery locations – Scope details including share of individual buyer locations being served in each contract, LoB/BU served, and pricing model employed  Proprietary database of 16+ BPO service providers and 20+ ITO service providers (updated annually)  The database tracks the following for each service provider: – Revenue and number of FTEs – Number of clients – FTE split by different lines of business – Revenue split by region – Location and size of delivery centers – Technology solutions developed 2 Note: We continually monitor the market and update the above list to include emerging service providers Confidentiality: Everest Group takes its confidentiality pledge very seriously. Any contract-specific information collected, will only be presented back to the industry in an aggregated fashion List of service providers covered in the analysis 1
    • 8 Copyright © 2013, Everest Global, Inc. EGR-2013-11-PD-0888 Everest Group’s definition of BFSI includes the following three segments 1 Business-to-consumer relationships 2 Business-to-business relationships  Retail financial services (B2C1) – Retail banking – Lending – Cards  Commercial banking (B2B2) Banking  Investment banking  Asset management  Custody & fund administration  Brokerage Capital markets  Life & pensions  Property & casualty Insurance Banking, Financial Services and Insurance (BFSI) Note: This report covers vertical-specific processes within the banking space. It does not include coverage of horizontal business processes such as F&A, HR, procurement, and contact centers Focus of this report
    • 9 Copyright © 2013, Everest Global, Inc. EGR-2013-11-PD-0888 This report provides a comprehensive understanding of the analytics services industry with focus on banking domain. Analytics adoption in 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 sub-verticals (cards, retail, commercial, and lending) and evaluates analytics capabilities of 20+ service providers in the banking space. Some of the findings in this report, among others, are: Understanding analytics Analytics in the banking industry Overview and abbreviated summary of key messages (page 1 of 2)  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 Some of the findings in this report, among others, are:  Analytics, an increasingly critical function today, has grown immensely in sophistication and the business impact it creates. Specially, prescriptive and predictive analytics have unlocked immense potential for banks. The key ingredients for a successful analytics solution are right data-sets, technology tools, domain knowledge, and people expertise  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
    • 10 Copyright © 2013, Everest Global, Inc. EGR-2013-11-PD-0888 Market size and deal characteristics Service provider landscape  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 been primarily 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 Overview and abbreviated summary of key messages (page 2 of 2)
    • 11 Copyright © 2013, Everest Global, Inc. EGR-2013-11-PD-0888 This study offers 5 distinct chapters providing a deep dive into key aspects of analytics services for banking industry; below are four charts to illustrate the depth of the report Source: Everest Group (2013) Levels of analytics Analytics deals by time period Period 2000-2004 Indexed to 100 Analytics deals by end purpose Analytics deal split by geography Customer insights Operational reporting Marketing Fraud and risk management Regulatory compliance Product optimization End purpose ITO deals BPO deals 4 7 1 3 1 5 2008 2012 North America Latin America APAC EMEA 2000-2004 2005-2007 2008-2010 2011-2013E Businessimpact Sophistication of solution Increasing maturity of analytics solutions Prescriptive analytics Predictive analytics Descriptive analytics Reporting Emerging areas of interest High Medium Low
    • 12 Copyright © 2013, Everest Global, Inc. EGR-2013-11-PD-0888 BFSI ITO research agenda Topic Release date Published Current October-2012Application Outsourcing (AO) in Insurance: PEAK Provider Landscape – Policies for Growth and Differentiation IT Application Outsourcing (AO) in Insurance – Service Provider Profile Compendium January-2013 February-2013IT AO in Capital Markets – Service Provider Profile Compendium October-2012Application Outsourcing (AO) in Banking – Service Provider Profiles Compendium January-2013Webinar Deck: State of the Global Services Market: 2013 Predictions January-2013Application Outsourcing (AO) in Capital Markets Annual Report – Change is the Only Constant December-2012IT AO in Capital Markets: PEAK Provider Landscape – Need for Speed: Capturing the Capital Markets Momentum June-2013Analytics in Banking: War is Ninety Percent Information Q2-2013IT Outsourcing in Banking – Annual Report 2013 Q3-2013IT Outsourcing in Banking – Service Provider Landscape with PEAK Matrix Assessment 2013 Q3-2013IT Outsourcing in Banking – Service Provider Profile Compendium 2013 Q3-2013IT Outsourcing in Insurance – Annual Report 2013 Q3-2013IT Outsourcing in Insurance – Service Provider Landscape with PEAK Matrix Assessment 2013 Q3-2013IT Outsourcing in Insurance – Service Provider Profile Compendium 2013 Q4-2013IT Outsourcing in Capital Markets – Annual Report 2013 Q4-2013IT Outsourcing in Capital Markets – Service Provider Landscape with PEAK Matrix Assessment 2013 Q4-2013IT Outsourcing in Capital Markets – Service Provider Profile Compendium 2013
    • 13 Copyright © 2013, Everest Global, Inc. EGR-2013-11-PD-0888 BFSI BPO research agenda Topic Release date Published Current October-2012Webinar Deck: PEAK into the BFSI Outsourcing Market Insurance Business Process Outsourcing (BPO) Market 2011-2012 – Annual Report November-2012 January-2013Insurance BPO Service Provider Profile Compendium October-2012A PEAK into the Leaders, Major Contenders, and Emerging Players of the Banking BPO Market December-2012Capital Markets BPO Service Provider Profile Compendium November-2012Banking BPO Service Provider Profile Compendium November-2012A PEAK into the Leaders, Major Contenders, and Emerging Players of Capital Markets BPO June-2013Analytics in Banking: War is Ninety Percent Information Q2-2013BFS BPO – Annual Report 2013 Q2-2013Banking BPO – Service Provider Landscape with PEAK Matrix Assessment 2013 Q3-2013Banking BPO – Service Provider Profile Compendium 2013 Q3-2013Capital Markets BPO – Service Provider Landscape with PEAK Matrix Assessment 2013 Q3-2013Capital Markets BPO – Service Provider Profile Compendium 2013 Q3-2013Insurance BPO – Annual Report 2013 Q3-2013IT Outsourcing in Capital Markets – Annual Report 2013 Q4-2013Insurance BPO – Service Provider Landscape with PEAK Matrix Assessment 2013 Q4-2013Insurance BPO – Service Provider Profile Compendium 2013
    • 14 Copyright © 2013, Everest Global, Inc. EGR-2013-11-PD-0888 Additional BFSI and analytics research references The following documents are recommended for additional insight on the topic covered in this report. The recommended documents either provide additional details on the topic or complementary content that may be of interest 1. BFS BPO Annual Report 2012 - Strong Growth Post the Downturn (EGR-2012-11-R-0710b); 2012: The global industry for Business Process Services (BPS) for Banking and Financial Services (BFS) is growing at a fast pace of over 16% annually. After a dip in 2008-09, due to the global financial crisis, BFS BPS is back on track, seeing rising contract numbers in both 2010 and 2011. Although BPO services account for only 10% of the overall market for BFS BPS, adoption of BPO is now expanding globally. This report analyzes the current trends and the future outlook for third-party BPO services for the global banking and capital markets industry 2. Application Outsourcing (AO) in Banking - Service Provider Profiles Compendium (EGR-2012-11-R-0763); 2012: The banking AO service provider compendium provides comprehensive and fact based snapshots of 25 service providers featured on Everest Group Banking AO PEAK Matrix. Each more than 5 pages service provider profile provides a comprehensive assessment of their service suite, scale of operations, domain, investments, and delivery locations specific to banking AO services For more information on this and other research published by Everest Group, please contact us: Rajesh Ranjan, Vice President: Rajat Juneja, Practice Director: Rishabh Gupta, Senior Analyst: Pallavi Saxena, Analyst: Phone: +1-214-451-3110 Email: info@everestgrp.com Everest Group Two Galleria Tower 13455 Noel Road, Suite 2100 Dallas, TX 75240 rajesh.ranjan@everestgrp.com rajat.juneja@everestgrp.com rishabh.gupta@everestgrp.com pallavi.saxena@everestgrp.com
    • 15 Copyright © 2013, Everest Global, Inc. EGR-2013-11-PD-0888 Everest Group Leading clients from insight to action Everest Group is an advisor to business leaders on the next generation of global services with a worldwide reputation for helping Global 1000 firms dramatically improve their performance by optimizing their back- and middle-office business services. With a fact-based approach driving outcomes, Everest Group counsels organizations with complex challenges related to the use and delivery of global services in their pursuits to balance short-term needs with long-term goals. Through its practical consulting, original research, and industry resource services, Everest Group helps clients maximize value from delivery strategies, talent and sourcing models, technologies, and management approaches. Established in 1991, Everest Group serves users of global services, providers of services, country organizations, and private equity firms in six continents across all industry categories. For more information, please visit www.everestgrp.com and research.everestgrp.com. Dallas (Corporate Headquarters) info@everestgrp.com +1-214-451-3000 New York info@everestgrp.com +1-646-805-4000 Toronto canada@everestgrp.com +1-416-865-2033 London unitedkingdom@everestgrp.com +44-207-129-1318 India / Middle East india@everestgrp.com +91-124-496-1000 Stay connected Blogs www.sherpasinblueshirts.com www.gainingaltitudeinthecloud.com Websites www.everestgrp.com research.everestgrp.com Twitter @EverestGroup @Everest_Cloud