Introduction

Rise of digital consumers, need for business agility, growing costs of regulatory compliance, and threat from non-banking competitors in areas such as payments were the key challenges faced by banks in 2014. Banks are aligning their technology priorities around cost containment, efficiency, risk & compliance management, and transformation. As a result, banks continued to invest in development of specific applications for compliance, risk management, channel-specific initiatives (social, mobile, etc.), and customer analytics.

The service provider landscape is intensifying as service providers ramp up their capabilities, invest in innovative technologies, form alliances, and acquire strategic targets to address the growing and complex applications services needs of banks and financial institutions.

In this research, we analyze the current trends and the future outlook for large, multi-year application outsourcing relationships for the global banking sector. We focus on:

• Trends in AO in the BFSI segment
• Market trends and activity for large AO relationships in banking
• Emerging priorities of buyers and key investment themes in banking AO
• Outlook for 2015-2016

The research also captures key movements in volume/value of banking AO transactions, evolving trends, market dynamics, and emerging priorities of buyers in the last 12 months.

SCOPE OF THE ANALYSIS

• Industry: Banking (retail banking, commercial banking, credit cards, loans, and mortgages); excludes capital markets and insurance
• Services: Large (TCV >US$25 million), multi-year (more than three years), and annuity-based application outsourcing
• Geography: Global
• Sourcing model: Third-party AO transactions; excludes shared services or Global In-house Centers (GICs)

CONTENT

This report is structured across three key sections, each containing insights into application outsourcing in BFSI and banking sector, with a specific focus on large-sized contracts:

• BFSI ITO market overview: Analysis of the overall BFSI IT Outsourcing (ITO) market and transaction trends:
• Market size, growth, and industry segmentation
• Market subvertical split
• Transaction trends for BFSI ITO (e.g., transaction volumes and value)
• Transaction trends by BFSI subverticals and geography
• Banking AO market overview: Analysis specific to the banking AO market with a focus on large transactions:
• Trends and characteristics for large-sized transactions in banking AO
• Demand characteristics for banking AO services by lines of business, AO subfunctions, geography, and buyer size
• Offshore leverage
• Global delivery locations
• Renewal activity
• Emerging priorities of banking buyers and key technology trends
• Technology priorities of banks across three focus areas – run-the-bank, manage-the-bank, and change-the-bank
• Implications for service providers