Introduction

The capital markets industry is grappling with high regulatory pressures, intense competition, and an uncertain economy. As a result of stagnated growth and a non-conducive environment to grow top-line, cost containment has become the single-most important area of focus for capital markets. Financial services firms are adopting different business levers to contain costs and improve profitability. They are adopting disruptive business models, mutualizing costs through shared utilities, and investing in digital technologies to stay ahead of competition. Buy-side and sell-side participants, as well as financial intermediaries are investing in risk & compliance management solutions, automation, mobility, big data & analytics, blockchain, and third-party platforms, as they focus on cost reduction, standardization, and portfolio rationalization.

With the capital markets industry witnessing a number of changes, IT service providers are helping clients to manage their budgets more effectively with cost reduction initiatives, and are looking to provide offerings that are tailored to the firms’ cost containment strategies. Service providers are accelerating their investments in automation to reduce costs, collaborating with buyers to invest in innovation, investing to provide customer-centric digital services, and forming alliances with leading platform providers to meet different client needs.

In this research, we analyze the current trends and the future outlook for large, multi-year application outsourcing relationships in the global capital markets sector. We have assessed 27 capital markets AO service providers on their capabilities for providing these services globally. These providers were mapped on the 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:

• Assessment of the service providers on a number of capability-related dimensions
• Characteristics of Leaders, Major Contenders, and Aspirants on the Everest Group capital markets AO PEAK MatrixTM
• “Star Performers” of 2016, 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

• Market trends and activity for large AO relationships in capital markets firms
• Capital markets AO PEAK MatrixTM characteristics
• Capital markets AO service provider characteristics

CONTENT

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

• Capital markets trends and its implications for key stakeholders
• Everest Group Performance Experience Ability Knowledge (PEAK) Matrix for capital markets AO
• Star Performers in the 2016 capital markets AO PEAK Matrix
• Capital markets AO PEAK Matrix characteristics:
• Market share and scale
• Scope characteristics
• Domain investments
• Delivery footprint
• Market activity
• Profiles of capital markets AO service providers