Outsourcing & IT services in Financial Services Retail banking BPO (Review Report)

Outsourcing & IT services in Financial Services Retail banking BPO (Review Report)

Introduction

This report combines all three briefs in the Outsourcing & IT Services in Financial Service Banking BPO theme. The market focus highlights opportunities and growth in key markets, the customer focus looks at banks' perceptions and take-up plans identifying drivers an inhibitors. Finally the databook offers a detailed market forecast broken down by market segment and country

Scope

The findings are supported by detailed outsourcing and BPO interviews with 100 retails banks The report covers primarily the North American and European markets, but market numbers are generally global The report covers banking specific BPO areas as well as outsourcing of more generic business processes

Highlights

Despite robust growth predicted in the banking BPO, Datamonitor's end-user research reveals that the banks currently outsourcing a business process remain the most likely to outsource further such processes and that the market growth going forward will predominantly be generated in this part of the market Retail banks are getting more confident in using outsourcing services and rate outsourcing quite high as the means to achieve their major business and IT goals. External supplier expertise on tap, overall rationalization driver and move from CapEx to OpEx were the top three drivers for outsourcing Interest in BPO services and actual take-up continues to rise in the retail banking sector as pressure on banks for technology-led transformation and operational efficiency continue to mount

Reasons to Purchase

Improving your understanding of the North American and European banking industries with Datamonitor's large scale primary research study Profit from better understanding of which areas banks look to outsource Use Datamonitor's market segmentation to position your offering relative to market demands and competitors

CATALYST 1
SUMMARY 1
METHODOLOGY 1
EXECUTIVE SUMMARY 2
Introduction 2
BPO in European and North American banking (Market Focus) 2
BPO and sourcing trends in retail banking (Customer Focus) 2
Retail Banking BPO (Databook) 2
BPO IN EUROPEAN AND NORTH AMERICAN BANKING (MARKET FOCUS) 5
Summary 5
A few key areas continue to dominate the banking BPO market 5
Cards processing 6
Mortgage processing 7
Check processing 7
Horizontal BPO areas 7
Cross- and up-selling will continue to be the dominant growth opportunity 8
Future take-up continues to look robust 10
Horizontal BPO generates most growth, but mortgage BPO looks bullish for 07-08 11
BPO AND SOURCING TRENDS IN RETAIL BANKING (CUSTOMER FOCUS) 13
Summary 13
Retail banking key corporate objectives are well supported by outsourcing 13
IT and business strategies are dominated by changing IT from a cost to a service and regulatory compliance 13
Outsourcing enables retail banks to achieve greater flexibility and scalability 16
Outsourcing is rapidly gaining currency as a vital element for corporate success 18
Selective outsourcing is the most widely used outsourcing strategy amongst respondents 21
Retail banks still remain sceptical about the merits of sending work offshore 22
The geographic distance is the primary drawback to offshore outsourcing 22
Government subsidies were rated the major driver for the offshore outsourcing 23
India will remain the primary offshoring market of choice 25
Banks seek technology leadership and financial flexiblity through BPO efforts 27
RETAIL BANKING BPO (DATABOOK) 28
Summary 28
Definitions 28
Industry specific BPO in retail banking 29
Horizontal BPO in retail banking 36
APPENDIX 42
Extended Methodology 42
Further reading 42
Ask the analyst 42


List of Tables
Table 1: Overall growth will tail off as growth in the most mature market segments slow. Key opportunities continue to exist however across both horizontal and banking specific processes 12
Table 2: Definitions 28
Table 3: Banking BPO and transaction processing services globally, 2002-2008 29
Table 4: Total banking BPO services by region, 2002-2008 30
Table 5: Total transaction processes services by region, 2002-2008 31
Table 6: Banking BPO services by country, 2002-2008 32
Table 7: Transaction processing services by country, 2002-2008 34
Table 8: Horizontal BPO spend by region, 2006 36
Table 9: Horizontal BPO spend by service area, 2002-2008 38
Table 10: Horizontal BPO services by country, 2002-2008 40


List of Figures
Figure 1: Business process outsourcing spend in the retail banking sector was $14.7bn in 2006 6
Figure 2: Bank research shows that interests in further BPO take up is greatest among the banks that already use some services 8
Figure 3: High interest levels remains trend for most BPO areas 10
Figure 4: Overall growth will tail off as growth in the most mature market segments slow. Key opportunities continue to exist however across both horizontal and banking specific processes 11
Figure 5: Retail banking primary IT and business objectives / main objectives that can be achieved through outsourcing (1 to 4, where 4 is the most important) 14
Figure 6: Retail banking main drivers for outsourcing 16
Figure 7: Proportion of respondents that are currently using / will highly consider using outsourcing in the next two years 18
Figure 8: Horizontal operations currently outsourced / highly considered for outsourcing 19
Figure 9: Operations currently outsourced / highly likely to be outsourced in the next 2 years 20
Figure 10: Retail banking overall outsourcing strategy 21
Figure 11: Main drawbacks to offshore outsourcing 22
Figure 12: Main drivers for offshore outsourcing 23
Figure 13: Rating offshore locations (1 is "unlikely to consider" and 4 is "very likely to consider") 25
Figure 14: Level of importance of certain criteria when choosing a services partner (with 4 being the most important) 27
Figure 15: Banking BPO and transaction processing services globally, 2002-2008, $m 29
Figure 16: Total banking BPO services by region, 2002-2008, $m 29
Figure 17: Total transaction processes services by region, 2002-2008, $m 31
Figure 18: Banking BPO services by biggest 10 countries 32
Figure 19: Transaction processing services by biggest 10 countries 34
Figure 20: Horizontal BPO spend by region, 2006 36
Figure 21: Horizontal BPO spend by service area, 2002-2008,$m 38
Figure 22: Horizontal BPO spend by biggest 10 countries 39