Introduction

Globally, BFSI is the largest vertical in terms of the total share in ITO spending. Of the global BFSI ITO activity in the last five years, Europe accounted for the highest wallet share. Further, within ITO transactions, Application Outsourcing (AO) accounted for a majority of the engagements.

The European banking and capital markets industry is currently going through an evolution. While the industry has been dominated by large-sized service providers, it is witnessing an emergence in tier-2 regional service providers. Demand for AO services is on the rise in Continental Europe region while Nordics and Germany remain underserved with scope of generating higher demand in near future. Further, the European banks and financial firms continue to operate in an uncertain regulatory environment and a strong move towards digitization which constitute the majority of the IT investments in the region. Chief Information Officers (CIOs) in Europe are looking at leveraging the next-generation services, such as social media, mobility, analytics, and cloud, to achieve cost arbitrage while enhancing customer experience and meeting regulatory compliance. As both European buyers (banks and capital markets firms) and global service providers seek to design solutions for these challenges, it is essential to understand the specific changes in the market environment, and devise an effective approach to adapt accordingly.

In this research, we analyze the current trends and the future outlook for large, multi-year application outsourcing relationships for the European banking and capital markets sector. We have assessed 20 banking AO service providers and 18 capital markets AO providers in Europe for their capabilities in providing these services in the region. These providers were mapped on Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix, 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 and capital markets AO in Europe
• Assessment of the service providers on a number of capability-related dimensions
• Characteristics of Leaders, Major Contenders, and Emerging Players on Everest Group banking and capital markets AO PEAK Matrix for Europe
• “Star Performers” of 2014, providers with the strongest forward movement over time – in terms of both market success and capability advancements
• Implications for capital markets buyers and service providers

SCOPE OF THE ANALYSIS

• Banking and capital markets ITO market overview (global with a focus on Europe)
• Market trends and activity for large AO relationships in European banks and capital markets firms
• European banking and capital markets AO service provider landscape
• European banking and capital markets AO PEAK Matrix characteristics

CONTENT

This report analyzes IT applications outsourcing in the banking and capital markets subverticals in Europe with a focus on large (TCV > US$25 million), annuity-based, multi-year (over three years) relationships:

• Banking and capital markets ITO market overview:
• Global IT outsourcing market size and vertical split
• Banking and capital markets IT market split
• Banking and capital markets transactions split by geography
• IT transaction trends in Europe for banking and capital markets
• European banking and capital markets AO overview and service provider landscape:
• Transaction trends in banking and capital markets AO in Europe
• Delivery capability assessment at key locations in Europe
• Market share analysis by different categories of service providers
• Market share analysis by banking and capital markets lines of business
• Delivery capability assessment based on scale, scope, domain investments, delivery footprint, and buyer satisfaction
• Market success assessment
• Everest Group Performance Experience Ability Knowledge (PEAK) Matrix for banking and capital markets AO in Europe
• Star Performers in the 2014 European banking and capital markets AO PEAK Matrix
• Europe banking and capital markets AO PEAK Matrix characteristics :
• Market share and scale
• Scope characteristics
• Delivery footprint
• Market activity
• Service provider capabilities in digital themes

Everest Group has a complimentary four-page PEAK Matrix preview document for this service provider landscape report.