IT Outsourcing in Banking - Service Provider Landscape with PEAK Matrix™ Assessment 2013

2 Aug 2013
by Jimit Arora



In 2012, BFSI buyers continued to remain under pressure to increase revenue, enhance customer experience, reduce costs, replace legacy systems, and meet regulatory requirements. To address these challenges, most banks focused on transforming themselves and increasing investments in technologies (such as social media, mobility, big data & analytics, and cloud computing) in order to enhance customer experience while simultaneously reducing their operational costs, better managing risk, and improving shareholder returns.

As financial institutions gear up for these changes, they are looking to identify strategic partners that can help them develop solutions which drive efficiency and sustain the pace of technological advancement in this rapidly-evolving industry. Additionally, with the continued trend towards consolidation, financial institutions are signing larger and more strategic AO contracts with a fewer number of service providers, a phenomenon that is expected to meaningfully alter the AO services landscape in the BFSI segment.

In this research, we analyze the capabilities of 28 leading AO service providers, specific to the global banking sector. These providers were mapped on Everest Group Performance | Experience | Ability | Knowledge (PEAK) MatrixTM, which is a composite index of a range of distinct metrics related to each provider’s capability and market success. In this report, we focus on:

  • The landscape of service providers for banking AO
  • Assessment of the service providers on a number of capability-related dimensions
  • Characteristics of Leaders, Major Contenders, and Emerging Players on Everest Group banking – AO PEAK Matrix
  • “Star Performers” of 2012, providers with the strongest forward movement over time – in terms of both market success and capability advancements
  • Implications for banking buyers and service providers

In addition to this, the research also provides an overview of the impact of recently proposed immigration reform on India-centric service providers and its clients.

Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix<sup>TM</sup> for large banking AO relationships 

Scope of the analysis

  • Industry: Banking (retail banking, wholesale banking, credit cards, loans, and mortgages); excludes capital markets and insurance
  • Services: Large (TCV > US$25 million), multi-year (>three years), and annuity-based application outsourcing
  • Geography: Global
  • Service providers: 28 leading banking AO service providers

Market share of providers in large active banking AO contracts 


This report is structured across three key sections, each containing insights on the banking AO service provider landscape, focusing on large-sized contracts:

  • Banking AO service provider landscape: Analysis of individual service provider capability and service provider groups across the following dimensions:
    • Scale
    • Scope
    • Domain investments
    • Delivery footprint
    • Buyer satisfaction
    • Market success
  • Analysis of each of the categories on Everest Group’s PEAK Matrix – Market Leaders, Major Contenders, and Emerging Players. Additionally, this year’s report focuses on identifying the 2012 “Star Performers” in banking AO. Key aspects covered include:
    • Commentary on the capabilities of each service provider
    • Delivery capability characteristics (scale, scope, domain investments, buyer satisfaction, and delivery footprint)
    • 2012 “Star Performers” analysis
    • Market success characteristics (transaction activity)
  • Implications for key stakeholders: Implications of trends on buyers and service providers

Some of the findings in this report are:

  • Most provider categories expanded their banking AO revenue in 2012. However, the pace of hiring was slow as they continue to increase their investment focus on non-linear growth
  • Contrary to the last year, banking AO buyers engaged in smaller-scope contracts in 2012
  • Offshore majors have the highest buyer satisfaction levels, followed by tier-2 Indian providers
  • Leaders accounted for 55 to 60% of the overall banking AO market in terms of ACV, cumulative TCV, and number of contracts; Major Contenders significantly expanded their market share in 2012
  • While most providers have built strong capabilities in regulatory and risk management solutions; they are now shifting focus towards analytics and mobility where significant opportunities exist
  • While Leaders continue to dominate the market in terms of overall revenue, their growth slowed during the year

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