IT Outsourcing in Capital Markets – Annual Report 2016

12 Oct 2016
by Aaditya Jain, Archit Mishra, Jimit Arora, Ronak Doshi

Assets Under Management (AUM), a key metric for global asset management industry, reached US$71.4 billion in 2015. While this was just an increase of 1% from 2014 levels, what is more important that it was led by increase in asset valuations and not by net new sales. Bond yields are at their lowest levels since the global financial crisis in a period of low interest rates in major economies around the world. Brexit has sent shockwaves through the capital markets worldwide, while much of the effects of Brexit will play out in the next two to three years, markets worldwide are grappling with a period of uncertainty.

Capital markets firms struggle with increasing costs, increasing regulation, and a period of low growth. In addition, technological advancement, especially digital, has created a new set of competitors that are not weighed down by the burden of legacy in their product portfolio, customer relationships, and IT setup. In 2016, capital markets firms will operate under these difficult market conditions and will need to compete with aggressive new entrants and peers, as the battle for market share and profit intensifies.

Firms will need to invest in next-generation technologies while holding IT budgets steady. This implies that saving money from run-the-business initiatives to fund change initiatives remains the only plausible way to continue technological advancement.

In this report, we look at the global trends in banking industry and their implication for application services outsourcing. We focus on:

  • Business challenges and priorities of capital markets firms
  • Market trends and activity for large AO relationships in banking


  • Industry: Capital markets
  • Services: Large (TCV > US$25 million), multi-year (>three years), and annuity-based application outsourcing
  • Geography: Global
  • Sourcing model: Third-party AO transactions; excludes shared services or Global In-house Centers (GICs)


This report is structured across three key sections, each containing insights into application outsourcing in the global capital markets sector, with a specific focus on large-sized contracts:

  • State of the global capital markets industry
  • Triple mandate for capital markets firms: Grow revenue, drive profitability and manage risks
  • Capital Markets AO market overview: Analysis specific to the capital markets AO with a focus on large transactions:
    • Market size of global capital markets AO
    • Trends and characteristics for large-sized transactions in capital markets AO
    • Demand characteristics for capital markets AO services by lines of business, AO subfunctions, geography, and buyer size
    • Renewal activity


Banking, Financial Services & Insurance (BFSI) - Information Technology Outsourcing (ITO)


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