Winds of change in member expectations, rising regulatory costs, and the roadblock stemming from legacy systems are the key challenges being faced by credit unions. Keeping pace with the changing member preferences and dynamic technology can be overwhelming. Even though credit unions have largely been regionalized and operate within a community, they need to form partner networks to mutualize their run costs and focus on improving member experience. Rising tech spends by large banks and increased interest in FinTechs pose major threats to credit unions in their digital journey. As per Everest Group estimates, the tech spend by top four banks in the U.S. is five times the technology spend of the entire credit union industry. An already limited tech budget, offset by core legacy system maintenance, eats into their funds as credit unions contemplate between run vs. change investments. In this report, we analyze the challenges and key trends for the credit unions in the United States. This report also presents key takeaways on how credit unions can accelerate their digital transformation journey and visualize the future state of this industry. Technology & customer preferences are changing rapidly, and it is imperative that credit unions keep pace with this change. SCOPE OF THE ANALYSIS Market segment: IT services Geography: United States Industry: Credit unions SOURCES LEVERAGED Expert analyst inputs Previous Everest Group research Secondary data sources that are publicly available CONTENTS This report focuses on the credit union industry in the United States: Credit unions – challenges, priorities and trends Digital disruption and changing consumer preferences Implications for credit unions to keep pace with the change Membership(s) Banking and Financial Services (BFS) – IT Services

Disruption in technology, rise of millennials, and competitive marketplace are leading to disintermediation in the value chain and business models of traditional banks. To keep pace with the digital change, banks are aligning with digital-first operating models, adopting cutting-edge technologies, and fostering new digital-savvy culture. Banking is increasingly being embedded in customer activities since it is an enabler. This transition is morphing the role of banks to become lifestyle experience orchestrators. Banks are focusing on the power of three E’s – experience, efficiency, and ecosystem – to enable their transformation journey. In this research, we study the experience-centric investments of 40 global banks. SCOPE OF THE ANALYSIS Market segment: IT services Geography: Global Industry: Banking Lines of business: Retail banking, cards & payments, commercial banking, and lending SOURCES LEVERAGED Previous Everest Group research Secondary data sources that are publicly available CONTENTS The research focuses on banking IT services industry with primary focus on customer experience: Analysis of business and technology investments by 40 global banks Implications for buyers and IT service providers Membership(s) Banking & Financial Services (BFS) - IT Services (ITS)

Technology is creating entirely new ways of serving the existing needs of customers and is significantly disrupting the value chain by improving the quality, speed, and price at which value is delivered. Challenger banks (FinTechs, non-traditional financial service providers, and neo-digital banks) are developing new products, services, and business models, impacting front- to back-office functions to compete with traditional banks. At the same time, regulators in Europe are pushing for open banking, thereby increasing API adoption among banks. The increasing competition and the growing adoption of digital channels are forcing traditional banks to adapt to new client processes and reinvent themselves. In this research, we analyze the customer-facing digital investments for 20 European retail banks. These banks have been mapped on Everest Group’s Digital Effectiveness Assessment model, which is a composite index of a range of distinct metrics related to each bank’s capability maturity and the resultant business outcomes. In this report, we focus on: Disruption in the UK and European retail banking sector Assessment of 20 leading European banks on Everest Group’s Digital Effectiveness Assessment model Identification of Digital Banking Leaders and their key differentiators Snapshot of capability maturity and business outcomes of all European banks assessed on the Digital Effectiveness Assessment model SCOPE OF THE ANALYSIS Industry: Retail banking Geography: Europe Enterprises: Includes 20 leading European banks, shortlisted on the basis of asset size as well as their focus on retail banking SOURCES LEVERAGED Only publicly-available information (i.e., information from the consumer’s perspective) has been used for the entire analysis in this report. CONTENTS The detailed report “Digital Effectiveness in Retail Banking | Focus on Banks in the United Kingdom and Europe: Identifying Digital Banking Leaders in the Open Banking Era”. Membership(s) Banking & Financial Services (BFS) - IT Services (ITS)

Disruption in technology is leading to disintermediation in the banking value chain and business model. FinTechs, non-traditional financial service providers, and neo-digital banks are developing new products, services, and business models, impacting front- to back-office functions to compete with traditional banks. The increasing competition and growing adoption of digital channels are forcing traditional banks to adapt to new client processes and reinvent themselves. The industry is expected to witness a sea change, as banks move to a co-creation model to combine, package, and offer products/services from banking and allied businesses by orchestrating customer lifecycle. In such a situation, banks will move away from being perceived as just a physical structure that offers financial services/products to being an ambient fabric connecting people and businesses. In this research, we analyse the customer-facing digital investments for 30 large North American retail banks. These banks have been mapped on Everest Group’s Digital Effectiveness Assessment Model, which is a composite index of a range of distinct metrics related to each bank’s capability maturity and the resultant business outcomes. In this report, we focus on: Future state of banking Assessment of 30 leading North American banks on Everest Group’s Digital Effectiveness Assessment Model Identification of Digital Banking Leaders and key features across all assessment dimensions Snapshot of capability maturity and business outcomes of all North American banks assessed on the Model Scope of the analysis Industry: Retail banking Geography: North America (the United States and Canada) Enterprises: Includes 30 leading North American banks (25 U.S. banks and 5 Canadian Banks), short-listed on the basis of asset size as well as their focus on retail banking Sources leveraged Only publicly-available information (i.e., information from a consumers’ perspective) has been used for the analysis in this report. Contents This report has two parts: • The detailed report “Digital Effectiveness in Retail Banking: Journey of North American Banks to Build SUPER Experiences” An “Executive Summary” which encapsulates the key findings the assessment Membership(s) Banking & Financial Services (BFS) - IT Services (ITS)

The market for third-party BPO in retail banking reached US$0.9 billion in 2015, and is expected to continue to grow at 4-7%. North America and United Kingdom continue to drive demand in this space. Asia Pacific also generates significant demand for retail banking BPO solutions. Changing consumer behavior, increased competition (especially from FinTechs), the growing importance of analytics, and regulatory changes are some of the factors shaping retail banks and, consequently, the outsourcing relationships of retail banking players. In this study we analyzed the performance of the global retail banking BPO space in 2015. We focused on: State of the market Market trends and solution characteristics across size and scope, Line of Business (LoB) adoption, regulatory reporting, technology model, and global sourcing Service provider landscape, which covers service providers’ market share and presence across various geographies Future outlook, which discusses the issues retail banks are likely to face in the future and possible solutions Service provider profile compendium, which profiles major retail banking BPO players Scope of analysis Third-party retail banking BPO contracts; it does not include shared services or Global In-house Centers (GICs) Over 160 active retail banking BPO contracts signed as of December 2015 Coverage across 19 retail banking BPO service providers: Accenture, Avaloq, Capgemini, Concentrix, EXL, Genpact, HCL, HP, Infosys, Mphasis, NIIT, Polaris, Intelenet, Sutherland Global Services, TCS, Tech Mahindra, Wipro, WNS, and Xchanging This report assists key stakeholders (buyers, service providers, and technology providers) in understanding the changing dynamics of the retail BPO space and helps them identify the recent trends and future outlook. In this backdrop, the report provides comprehensive coverage of the global retail banking BPO space including detailed analysis of the state of the market, market trends and solution characteristics service provider landscape, and future outlook. It also includes a service provider profile compendium. Some of the findings in this report are: The tightening regulatory environment has driven up the inclusion of regulatory support in retail banking BPO contracts While North America and United Kingdom drive most of the revenue, Asia Pacific is increasingly becoming significant and accounts for more than one-fifth of the demand ` Transaction processing and account servicing processes constitute almost half of the retail banking BPO Small banks require higher technology support from the service providers to up their game, thus, resulting in them leveraging platform solutions more A single service provider accounted for over 50% growth of the retail banking BPO market by revenue Advanced analytics capabilities will continue to increase in importance for both banks and service providers Everest Group has a complimentary four-page PEAK Matrix preview document for this service provider landscape report. Membership(s) Banking, Financial Services & Insurance (BFSI) - Business Process Outsourcing (BPO)

Since the financial crisis, European banks have not made returns in excess of their cost of equity, and the trend seems unlikely to change in the coming years. Low interest rates and intensifying regulatory scrutiny have further increased the pressure on the traditional banking business model. At the same time, digital disruption combined with the influx of investments into FinTechs is forcing the banks to consistently fund their innovation agenda in order to stay relevant to their customers. European banks are, thereby, aggressively investing in digital channels to serve the growing demand for cutting-edge digital banking experiences. At the same time, the focus is also on maintaining an optimized physical network equipped with multiple self-service technologies and customer-friendly branch formats to optimize the operational costs as well as enhance their appeal to the millennial customers. Banks are also trying to mobilize the power of social media for more cost-effective customer service. In this research, we have analyzed 18 large European retail banks and mapped them on Everest Group’s Ability | Performance | Experience (APEX) Matrix, which is a composite index of a range of distinct metrics related to each bank’s customer-facing digital investments and their associated business impact. In this report, we focus on: Assessment of the bank’s digital functionality on multiple capability-related dimensions Characteristics of the leading banks on individual themes assessed on Everest Group’s APEX Matrix for digital effectiveness in banking SCOPE OF THE ANALYSIS Industry: Retail banking Geography: Europe Enterprises: Includes 18 large European banks, short-listed on the basis of asset size as well as their focus on retail banking SOURCES LEVERAGED Only publicly-available information (i.e., information from a consumers’ perspective) has been used for the analysis in this report. Key sources include: Google Play and App Store Demos / consumer access to mobile apps and online platforms of the banks that are assessed Social media platforms – Twitter, Facebook, LinkedIn, and YouTube Aggregators/tools – Alexa, App Anie, Likealyzer, SEMRush, SocialBlade, and Twitonomy Company filings and press releases (annual reports, investor presentations, SEC filings, etc.) Membership(s) Application & Digital Services Banking, Financial Services & Insurance (BFSI) - Information Technology Outsourcing (ITO)

Digital proliferation, evolving customer demand patterns, need for cost containment & efficiency, high commoditization, increasing number of cyberattacks, and rising threat from non-banking competitors are some of the challenges upsetting large retail banking corporations in the United States. Banks are increasingly aligning their business priorities around next-generation technology themes and are focusing on formulating their go-to-market strategy with customer-centric offerings. Although the digital banking channels have become mainstream, banks are consistently incorporating value-added functionalities and upgrading security standards on these channels to boost customer loyalty and gain a competitive edge. At the same time, there is growing focus on mobilizing the power of social media networks for more cost-effective customer service. Large retail banks are also channelizing their investments in setting up smaller, more flexible and customer-friendly branches equipped with multiple self-service technologies to optimize the operational costs and enhance their appeal to the millennial customers at the same time. In this research, we analyze consumer-facing digital functionalities as well as their associated business impact on 26 large U.S. retail banks. These banks have been mapped on Everest Group’s Ability | Performance | Experience (APEX) Matrix, which is a composite index of a range of distinct metrics related to each bank’s customer-facing digital investments and the associated business impact. In this report we focus on: Assessment of the bank’s digital functionality on multiple capability-related dimensions Characteristics of leading banks on individual themes assessed on the Everest Group’s APEX Matrix for digital effectiveness in banking   SCOPE OF THE ANALYSIS Industry: Retail banking Geography: The United States Enterprises: Includes 26 leading U.S. banks, short-listed on the basis of size as well as their focus on retail banking   SOURCES LEVERAGED Only publicly-available information (i.e., information from a consumers’ perspective) has been used for the analysis in this report. Key sources include: Google Play and App Store Demos / consumer access to mobile apps and online platforms of the banks that are assessed Social media platforms – Twitter, Facebook, LinkedIn, and YouTube Aggregators/tools – Alexa, App Anie, Likealyzer, SEMRush, SocialBlade, and Twitonomy Company filings and press releases (annual reports, investor presentations, SEC filings, etc.)

The global sourcing model for delivering retail and commercial banking services has been adopted by banks of different sizes and from different regions. It has now reached a state of maturity across large banks of more than US$50 billion revenue. These banks were the leading adopters of this model. However, smaller-sized banks are still developing and honing their offshoring strategies. The growth of GIC setups has been taking place to the tune of ~2.5% per annum over the past few years; however, this market has undergone many transformations in terms of growth leaders, strategies and location shifts. Within this industry, there are differences within banks in terms of offshoring of industry-specific processes from the perspectives of scale and breadth of work. Additionally, forays are being made by offshore banking GICs in IT application development and analytics for retail and commercial banking, specifically. This report provides an assessment of the current landscape of this industry from the point of view of GICs as well as next-generational changes such as development and adoption of new technologies (service delivery automation and mobility solutions), transformations in the sourcing models, and offshoring of complex processes.   Scope and contents This report provides Everest Group’s perspectives on GICs delivering retail and commercial banking services as well as their evolution & transformation across various themes. The report discusses: Market overview and landscape Evolution and maturity Key trends and outlook for the future

Introduction The rise of the digital consumers, need for cost containment & efficiency, multi-channel integration, and rising threat from non-banking competitors were some of the key challenges faced by banks in 2014. Banks are specifically aligning their technology priorities around digital transformation and are heavily focusing on formulating their go-to-market strategy with customer-centric offerings. Direct channels, such as mobile and internet, have become increasingly important for retail banking. At the same time, there is growing focus on mobilizing the power of social media networks to engage with the next-generation customers while promoting their brands. In a highly mature and competitive market that is characterised by low differentiation for products and prices, banks are leveraging digital technology themes in order to keep up with the next-generation consumer base, which prefers to perform daily banking activities on an anytime/anywhere basis. In this research, we analyse consumer-facing digital functionalities as well as the associated business impact on nine retail banks in United Kingdom. These banks have been mapped on the Everest Group Ability | Performance | Experience (APEX) Matrix, which is a composite index of a range of distinct metrics related to each bank’s customer-facing digital investments and business impact. In this report, we focus on: Assessment of the bank’s digital functionalities on multiple capability-related dimensions Characteristics of leading banks on the individual themes assessed on the Everest Group APEX Matrix for digital effectiveness in banking SCOPE OF THE ANALYSIS Industry: Retail banking Geography: United Kingdom Enterprises: Includes nine leading UK banks, shortlisted on the basis of the largest asset size, with a major focus on retail banking business, but not falling under the same parent group SOURCES LEVERAGED Only publicly-available information (i.e., information from a consumers’ lens) has been used for the entire analysis in this report: Google Play and iTunes Demos / consumer access of mobile apps and online platforms of different retail banks Social media platforms – Twitter, Facebook, LinkedIn, YouTube, and Google+ Aggregators/tools – Alexa, Likealyzer, SEMRush, SocialBlade, Twitonomy, and XYO Company filings and press releases (annual reports, investor presentations, SEC filings, etc.)

Introduction The rise of the digital consumers, need for cost containment and efficiency, multi-channel integration, and rising threat from non-banking competitors were some of the key challenges faced by banks in 2014. Banks are specifically aligning their technology priorities around digital transformation and are heavily focusing on formulating their go-to-market strategy with customer-centric offerings. Direct channels, such as mobile and internet, have become increasingly important for retail banking. At the same time, there is growing focus on mobilizing the power of social media networks to engage with the next-generation customers, while promoting their brands. In a highly mature and competitive market that is characterized by low differentiation for products and prices, banks are leveraging digital technology themes in order to keep up with the next-generation consumer base, which prefers to perform daily banking activities on an anytime/anywhere basis. In this research, we analyze consumer-facing digital functionalities as well as the associated business impact on 14 retail banks in the United States. These banks have been mapped on the Everest Group Ability | Performance | Experience (APEX) Matrix, which is a composite index of a range of distinct metrics related to each bank’s customer-facing digital investments and business impact. In this report, we focus on: Assessment of the bank’s digital functionalities on multiple capability-related dimensions Characteristics of leading banks on the individual themes assessed on the Everest Group APEX Matrix for digital effectiveness in banking SCOPE OF THE ANALYSIS Industry: Retail banking Geography: United States Enterprises: Includes 14 leading U.S. banks, short-listed on the basis of size as well as their focus on retail banking SOURCES LEVERAGED Only publicly-available information (i.e., information from a consumers’ lens) has been used for the entire analysis in this report: Google Play and iTunes Demos / consumer access of mobile apps and online platforms of different retail banks Social media platforms – Twitter, Facebook, LinkedIn, YouTube, and Google+ Aggregators/tools – Alexa, Likealyzer, SEMRush, SocialBlade, Twitonomy, and XYO Company filings and press releases (annual reports, investor presentations, SEC filings, etc.)