BPO Opportunities in Banking: 2011 ~~~

Transcription

1 BPO Opportunities in Banking: 2011 ~~~ Market Assessment March 2011

2 About provides buy-side and sell-side organizations with deeper research and analyses in front office, mid-office and back office BPO than any other research firm in the world. The company s subscription-based model provides subscribers with robust market analyses, case studies, vendor assessments, contract analyses, market reports and access to a content-rich BPO contracts database. The firm covers a wide range of industries including financial services, government and utilities sectors, and tracks worldwide and regional BPO activity. s home page is The company tracks business services activity. In particular, focuses on the following business services and process areas: Front-office customer management services Middle office industry-specific processing services such as policy administration, claims processing services, and payment processing Back office support services such as HR services, finance & accounting services, and procurement services provides information to its clients in a variety of forms, including within: s BPO subscription services, to assist organizations in developing sourcing strategies and in supporting individual sourcing projects including vendor short-list development Workshops, to assist organizations in identifying the most appropriate areas of BPO for their organization Business case development, to assist organizations in deciding whether BPO is appropriate for individual processes For more details, contact: U.S: Riverside Center 275 Grove Street Suite Newton MA Phone: (617) U.K.: Atrium Court, The Ring Bracknell RG12 1BW Phone: +44 (0) France: 4 place Louis Armand Tour de l'horloge Paris France Phone: Germany: lm Mediapark Köln Germany Phone: +49 (0) by. March 2011

3 Abstract The purpose of this study is to assist sourcing managers in understanding sourcing developments within the banking sector and to recommend options for vendors in addressing the business process outsourcing market in the banking sector. In particular the study uses senior executive interviewing to establish: Client requirements, in support of business initiatives Market drivers and inhibitors Planned BPO purchasing intentions. The study complements s earlier market assessments of Business Process Outsourcing in the banking sector by including an updated analysis of user expectations and attitudes towards use of business process outsourcing. s BPO Opportunities in the Banking Sector market assessment report is designed for: Sourcing managers investigating sourcing developments within the banking sector Marketing, sales and business managers developing strategies to target service opportunities within the BPO market Financial analysts specializing in the support services sector. The term business process outsourcing (BPO) is defined as the outsourcing of business functions or processes. In order to qualify under this definition BPO contracts must involve the vendor taking responsibility for operational management of the business activity. Potential BPO activities include: Front-office services, including customer management services & billing services, and document management services Middle-office administration services Industry-specific processing services e.g. mortgage processing services and card processing services Back-office support services Finance and accounting services HR Services including payroll services, HR administration services, managed recruitment services and training provision and administration Services for procurement of indirect goods and services Copyright 2011 by. All rights reserved. Printed in the United Kingdom. No part of the publication may be reproduced or distributed in any form, or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher. The information provided in this report shall be used only by the employees of and within the current corporate structure of s clients, and will not be disclosed to any other organization or person including parent, subsidiary, or affiliated organization without prior written consent of. exercises its best efforts in preparation of the information provided in this report and believe the information contained herein to be accurate. However, shall have no liability for any loss or expense that may result from incompleteness or inaccuracy of the information provided by. March 2011

4 Table of Contents Chapter 1: Introduction 1 A. Objectives and Scope 1 B. Methodology 2 C. Structure of the Report 3 Chapter 2: Executive Summary 4 A. Investment Banks to Change Operating Models in Investment Research & Retail Banks in Customer Care 4 B. BPO Continues in Support of Emerging Market Initiatives within Banking Sector 9 C. Twenty-One Per Cent of Banks Planning to Purchase Additional BPO Services in Next 12-Months 10 D. Net Migration Offshore Continues within Multishoring Approach 12 Chapter 3: Market Size & Growth 14 A. Market Forecast 14 Chapter 4: Key Business Issues & Initiatives 16 A. Key Business Issues 16 B. Business Initiatives 30 Chapter 5: Need for New Operating Models 48 A. Need for Change in Operating Model 48 B. Operating Model Changes Planned by. - i - March 2011

5 Chapter 6: Planned Use of BPO Services 61 A. Changes in BPO Expenditure Planned 61 B. BPO Purchasing Intentions 64 C. BPO Purchasing Objectives 65 D. BPO Purchasing Intentions by Process 68 Chapter 7: Attitudes to BPO Service Delivery 71 A. Attitudes to Service Bundling 71 B. Attitudes to Gainsharing 75 C. Changes in Use of Offshoring 77 D. Sourcing Strategy Intentions by. - ii - March 2011

6 List of Exhibits Business Issues Faced: Investment Banking...6 Business Issues Faced: Retail Banking...7 Operating Model Changes Planned: Investment Banking...8 Operating Model Changes Planned: Retail Banking...8 Initiatives Planned: Investment Banking...9 Initiatives Planned: Retail Banking...9 BPO Purchasing Objectives: Investment Banking BPO Purchasing Objectives: Retail Banking BPO Purchasing Intentions by Process: Investment Banking BPO Purchasing Intentions by Process: Retail Banking Changes to Use of Offshore Third-Party BPO Services Sourcing Strategy Intentions: Investment Banking Sourcing Strategy Intentions: Retail Banking BPO in Banking Sector Market Forecast: BPO in Banking Sector Market Forecast by Service Type: Business Issues Faced Business Issues Faced: Investment Banking Business Issues Faced: Retail Banking Business Issues Faced: Asia-Pac Business Issues Faced: Continental Europe Business Issues Faced: U.K Business Issues Faced: U.S Importance of Business Metrics Importance of Business Metrics: Investment Banking Importance of Business Metrics: Retail Banking Importance of Business Metrics: Asia-Pac Importance of Business Metrics: Continental Europe Importance of Business Metrics: U.K Importance of Business Metrics: U.S Cost Reduction Initiatives by Sub-sector Cost Reduction Initiatives by Geography by. - iii - March 2011

7 Customer Experience Improvement Initiatives by Sub-sector Customer Experience Improvement Initiatives by Geography Speed-to-Market Acceleration Initiatives by Sub-sector Speed-to-Market Acceleration Initiatives by Geography Emerging Markets Opportunities Initiatives by Sub-sector Emerging Markets Opportunities Initiatives by Geography Need for Change in Operating Model by Sub-sector Need for Change in Operating Model by Geography Intended Change to Operating Models by Sub-sector Intended Change to Operating Models by Geography Satisfaction with Operating Models Satisfaction with Operating Models: Investment Banking Satisfaction with Operating Models: Retail Banking Satisfaction with Operating Models: Asia-Pac Satisfaction with Operating Models: Continental Europe Satisfaction with Operating Models: U.K Satisfaction with Operating Models: U.S Operating Model Changes Planned Operating Model Changes Planned: Investment Banking Operating Model Changes Planned: Retail Banking Operating Model Changes Planned: Asia-Pac Operating Model Changes Planned: Continental Europe Operating Model Changes Planned: U.K Operating Model Changes Planned: U.S Changes in BPO Expenditure Planned Drivers for Decrease in BPO Expenditure Drivers for Increase in BPO Expenditure Changes in BPO Expenditure: Investment Banking Drivers for Decrease in BPO Expenditure: Investment Banking Drivers for Increase in BPO Expenditure: Investment Banking Changes in BPO Expenditure: Retail Banking Drivers for Decrease in BPO Expenditure: Retail Banking Drivers for Increase in BPO Expenditure: Retail Banking BPO Purchasing Intentions by Sub-sector BPO Purchasing Intentions by Geography BPO Purchasing Objectives by. - iv - March 2011

8 BPO Purchasing Objectives: Investment Banking BPO Purchasing Objectives: Retail Banking BPO Purchasing Objectives: Asia-Pac BPO Purchasing Objectives: Continental Europe BPO Purchasing Objectives: U.K BPO Purchasing Objectives: U.S BPO Purchasing Intentions by Process BPO Purchasing Intentions by Process: Investment Banking BPO Purchasing Intentions by Process: Retail Banking BPO Purchasing Intentions by Process: Asia-Pac BPO Purchasing Intentions by Process: Continental Europe BPO Purchasing Intentions by Process: U.K BPO Purchasing Intentions by Process: U.S Business Environment Impact on Sourcing Attitudes Business Environment Impact on Sourcing Attitudes: Investment Banking Business Environment Impact on Sourcing Attitudes: Retail Banking Business Environment Impact on Sourcing Attitudes: Asia-Pac Business Environment Impact on Sourcing Attitudes: Continental Europe Business Environment Impact on Sourcing Attitudes: U.K Business Environment Impact on Sourcing Attitudes: U.S Reasons for Increased Preference for Multi-Sourcing Reasons for Increased Preference for Multi-Sourcing: Investment Banking Reasons for Increased Preference for Multi-Sourcing: Retail Banking Willingness to Adopt Gainsharing by Sub-sector Willingness to Adopt Gainsharing by Geography Reasons Against Adoption of Gainsharing Reasons Against Adoption of Gainsharing: Investment Banking Reasons Against Adoption of Gainsharing: Retail Banking Appropriate Value to Share by Sub-sector Appropriate Value to Share by Geography Changes to Use of Offshore Third-Party BPO Services by Sub-sector Changes to Use of Offshore Third-Party BPO Services by Geography Reasons for Planned Increase in Level of Offshore Service Usage Reasons for Planned Decrease in Level of Offshore Service Usage Reasons for Increase in Level of Offshore Service Usage: Investment Banking by. - v - March 2011

9 Reasons for Decrease in Level of Offshore Service Usage: Investment Banking Reasons for Increase in Level of Offshore Service Usage: Retail Banking Reasons for Decrease in Level of Offshore Service Usage: Retail Banking Sourcing Strategy Intentions Sourcing Strategy Intentions: Investment Banking Sourcing Strategy Intentions: Retail Banking Sourcing Strategy Intentions: Asia-Pac Sourcing Strategy Intentions: Continental Europe Sourcing Strategy Intentions: U.K Sourcing Strategy Intentions: U.S by. - vi - March 2011