Analytics in banking preview deck - june 2013

Banking, Financial Services, and Insurance (BFSI) Outsourcing
Market Report – June 2013 – Preview Deck
Topic: Analytics in Banking: War is Ninety Percent
Information1
Copyright © 2013, Everest Global, Inc.
EGR-2013-11-PD-0888
1 War is ninety percent information. – Napoleon Bonaparte (1769-1821)

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 Other | Market intelligence, service provider capabilities, technologies
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Information
technology
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Banking, financial
services, insurance
Global sourcing
Cloud Vista
Human resources Recruitment process
Transaction
Intelligence
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Service provider
Intelligence

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Background and scope
Background of the research
Increasing affordability / cost efficiency of storage systems coupled with the meteoric rise of Internet and social media in the last decade has
led to creation and assimilation of humungous amounts of unstructured data. Organizations today, are on the lookout for means to
effectively process this unstructured data to gather meaningful insights that can be leveraged for superior decision making. Managing and
processing data which is emanating from a variety of sources, generated in multiple formats and is delivered at high velocity is a key priority
for enterprises. For this purpose, companies across verticals are leveraging analytics for improving their data-management capabilities to
better understand customer needs, streamline and automate processes, identify clandestine patterns, and make accurate forecasts
The Banking, Financial Services, and Insurance (BFSI) industry is one of the largest adopters of analytics services. Economic turmoil,
increasingly demanding customer profile, and regulatory pressures have created a challenging environment for banks. Further, heightened
need of customer focus is driving the demand for analytics solutions. Amidst this environment, banks increasingly realize the value they can
unlock through evolved analytics capabilities.
On the supply side, evolution in technology and people expertise has enabled service providers to meet this growing need of banks and
make previously inconceivable tasks possible. Service providers are enhancing their capabilities at a furious pace – primarily through
acquisitions and alliances.
In this research, we analyse the current trends, key uses and broad service provider landscape for analytics services, specifically
for the banking sector. We focus on:
 Understanding analytics: key elements, processes, functions and deployment areas
 Banking market size and key transaction characteristics
 Key drivers, rends and activity for analytics in banking
 Major service provider categories and capabilities
Scope of this report
 Industry: Banking (retail banking, wholesale banking, credit cards, loans, and mortgages); excludes capital markets and insurance
 Services: Banking (industry-specific BP services), Banking-IT (application and infrastructure services)
 Geography: Global

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Table of contents (page 1 of 2)
Background and methodology 5
Summary of key messages 10
Section I: Understanding analytics 13
 Summary 14
 Analytics and its building blocks 15
 Levels of analytics 16
 Analytics value chain 17
 Analytics solution implementation – ITO model 18
 Analytics solution implementation – BPO model 19
Section II: Analytics in the banking industry 20
 Summary 21
 Drivers for analytics adoption in banking 22
 Recent analytics initiatives of large banks 30
 Challenges faced by banks in analytics implementation 32
Section III: Analytics in banking: Market size and deal characteristics 33
 Summary 34
 Market size 35
 Deal characteristics 36
Topic Page no.

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Table of contents (page 2 of 2)
Section IV: Service provider landscape 42
 Summary 43
 Analytics service provider categories 44
 Service provider capabilities by banking LoBs 45
 Service provider investment in analytics – key themes 46
 Recent initiatives and alliances of service providers for analytics offerings 47
Section V: Implementing an analytics solution: Key steps / considerations (case study) 55
Section VI: Implications for key stakeholders 61
 Implications for buyers 62
 Implications for service providers 63
Appendix 64
 Analytics-related M&A by service providers in the financial services space 65
 Glossary of terms 67
 BFSI research calendar 68
 References 70
Topic Page no.

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Consistent with other research areas, our BFSI coverage is
based on four pillars of strength to produce actionable and
insightful research
 Round the year tracking of all the service providers across ITO and BPO in BFSI
 Dedicated team for ITO and BPO research, spread over two continents
 20+ years of advising clients on ITO and BPO related decisions
 Executive-level relationships with buyers, service providers, technology providers, and industry associations
Robust definitions and
frameworks
1
Primary sources of
information
2
Diverse set of market
touch-points
3
Fact-based research
4
 Market thought leadership
 Actionable and insightful research
 Syndicated and custom research deliverables
Impact on value
proposition to market
Impact on efficiency or
effectiveness of process
Impact on cost of process
Low High
High
Low
Strategic focus
Processexpertise
Domain expertise
1x
0.1x
10x
Services
Industry
Service
Enablers
Service
ProvidersEnterprises

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This report is based on two key sources of proprietary
information
 Proprietary database of 250+ Banking BPO contracts
and 300+ Banking ITO contracts (updated annually)
 The database tracks the following elements of each
contract:
– Buyer details including size and signing region
– Contract details including service provider, contract
type, TCV and ACV, service provider FTEs, start and
end dates, duration, and delivery locations
– Scope details including share of individual buyer
locations being served in each contract, LoB/BU
served, and pricing model employed
 Proprietary database of 16+ BPO service providers and
20+ ITO service providers (updated annually)
 The database tracks the following for each service
provider:
– Revenue and number of FTEs
– Number of clients
– FTE split by different lines of business
– Revenue split by region
– Location and size of delivery centers
– Technology solutions developed
2
Note: We continually monitor the market and update the above list to include emerging service providers
Confidentiality: Everest Group takes its confidentiality pledge very seriously. Any contract-specific information collected, will only be presented back to the industry
in an aggregated fashion
List of service providers covered in the analysis
1

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Everest Group’s definition of BFSI includes the following three
segments
1 Business-to-consumer relationships
2 Business-to-business relationships
 Retail financial services
(B2C1)
– Retail banking
– Lending
– Cards
 Commercial banking (B2B2)
Banking
 Investment banking
 Asset management
 Custody & fund
administration
 Brokerage
Capital markets
 Life & pensions
 Property & casualty
Insurance
Banking, Financial Services
and Insurance (BFSI)
Note: This report covers vertical-specific processes within the banking space. It does not include coverage
of horizontal business processes such as F&A, HR, procurement, and contact centers
Focus of this report

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This report provides a comprehensive understanding of the analytics services industry with focus on banking
domain. Analytics adoption in banking industry is covered in depth, exploring various aspects such as market
size, key drivers, recent analytics initiatives, and challenges. The report also analyses the trends in analytics
deals for various banking sub-verticals (cards, retail, commercial, and lending) and evaluates analytics
capabilities of 20+ service providers in the banking space. Some of the findings in this report, among others,
are:
Understanding
analytics
Analytics in the
banking industry
Overview and abbreviated summary of key messages
(page 1 of 2)
 In the banking industry, analytics adoption is driven by various factors such as
real-time response requirements, increasingly demanding customer profile, and
regulatory pressures. Banks are primarily implementing analytics solutions for
better marketing, increasing customer value, controlling customer churn, and
fraud management
Some of the findings in this report, among others, are:
 Analytics, an increasingly critical function today, has grown immensely in
sophistication and the business impact it creates. Specially, prescriptive and
predictive analytics have unlocked immense potential for banks. The key
ingredients for a successful analytics solution are right data-sets, technology
tools, domain knowledge, and people expertise
 Both IT and BPO service providers are at the forefront of providing analytics
solutions, albeit with different models. While BPO players bring in the people
expertise, IT service providers focus on the technology aspect of an analytics
solution

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Market size and
deal characteristics
Service provider
landscape
 The global analytics services market is estimated to be around US$XX billion
(FY 2012) and growing at ~YY%. Of this, market for analytics services in the
banking industry is estimated to be ~US$ZZ million (FY 2012)
 Analytics deals have been primarily announced by large-sized banks, however
adoption among small and medium sized banks is picking up
 While North America has traditionally dominated analytics implementations,
APAC and EMEA have witnessed growing adoption of these solutions in the
banking industry
 Banking analytics service providers can be classified into two broad groups –
ITO/BPO service providers and pure-play analytics service providers. These
service providers are most active in the retail banking and lending lines of
business
Overview and abbreviated summary of key messages
(page 2 of 2)

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This study offers 5 distinct chapters providing a deep dive
into key aspects of analytics services for banking industry;
below are four charts to illustrate the depth of the report
Source: Everest Group (2013)
Levels of analytics Analytics deals by time period
Period 2000-2004 Indexed to 100
Analytics deals by end purpose Analytics deal split by geography
Customer insights
Operational reporting
Marketing
Fraud and risk management
Regulatory compliance
Product optimization
End purpose ITO deals BPO deals
4
7
1
3
1
5
2008 2012
North America
Latin America
APAC
EMEA
2000-2004 2005-2007 2008-2010 2011-2013E
Businessimpact
Sophistication of solution
Increasing maturity of analytics solutions
Prescriptive
analytics
Predictive
analytics
Descriptive
analytics
Reporting
Emerging areas of
interest
High Medium Low

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BFSI ITO research agenda
Topic Release date
Published Current
October-2012Application Outsourcing (AO) in Insurance: PEAK Provider Landscape – Policies for Growth and Differentiation
IT Application Outsourcing (AO) in Insurance – Service Provider Profile Compendium January-2013
February-2013IT AO in Capital Markets – Service Provider Profile Compendium
October-2012Application Outsourcing (AO) in Banking – Service Provider Profiles Compendium
January-2013Webinar Deck: State of the Global Services Market: 2013 Predictions
January-2013Application Outsourcing (AO) in Capital Markets Annual Report – Change is the Only Constant
December-2012IT AO in Capital Markets: PEAK Provider Landscape – Need for Speed: Capturing the Capital Markets Momentum
June-2013Analytics in Banking: War is Ninety Percent Information
Q2-2013IT Outsourcing in Banking – Annual Report 2013
Q3-2013IT Outsourcing in Banking – Service Provider Landscape with PEAK Matrix Assessment 2013
Q3-2013IT Outsourcing in Banking – Service Provider Profile Compendium 2013
Q3-2013IT Outsourcing in Insurance – Annual Report 2013
Q3-2013IT Outsourcing in Insurance – Service Provider Landscape with PEAK Matrix Assessment 2013
Q3-2013IT Outsourcing in Insurance – Service Provider Profile Compendium 2013
Q4-2013IT Outsourcing in Capital Markets – Annual Report 2013
Q4-2013IT Outsourcing in Capital Markets – Service Provider Landscape with PEAK Matrix Assessment 2013
Q4-2013IT Outsourcing in Capital Markets – Service Provider Profile Compendium 2013

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BFSI BPO research agenda
Topic Release date
Published Current
October-2012Webinar Deck: PEAK into the BFSI Outsourcing Market
Insurance Business Process Outsourcing (BPO) Market 2011-2012 – Annual Report November-2012
January-2013Insurance BPO Service Provider Profile Compendium
October-2012A PEAK into the Leaders, Major Contenders, and Emerging Players of the Banking BPO Market
December-2012Capital Markets BPO Service Provider Profile Compendium
November-2012Banking BPO Service Provider Profile Compendium
November-2012A PEAK into the Leaders, Major Contenders, and Emerging Players of Capital Markets BPO
June-2013Analytics in Banking: War is Ninety Percent Information
Q2-2013BFS BPO – Annual Report 2013
Q2-2013Banking BPO – Service Provider Landscape with PEAK Matrix Assessment 2013
Q3-2013Banking BPO – Service Provider Profile Compendium 2013
Q3-2013Capital Markets BPO – Service Provider Landscape with PEAK Matrix Assessment 2013
Q3-2013Capital Markets BPO – Service Provider Profile Compendium 2013
Q3-2013Insurance BPO – Annual Report 2013
Q3-2013IT Outsourcing in Capital Markets – Annual Report 2013
Q4-2013Insurance BPO – Service Provider Landscape with PEAK Matrix Assessment 2013
Q4-2013Insurance BPO – Service Provider Profile Compendium 2013

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Additional BFSI and analytics research references
The following documents are recommended for additional insight on the topic covered in this report. The recommended
documents either provide additional details on the topic or complementary content that may be of interest
1. BFS BPO Annual Report 2012 - Strong Growth Post the Downturn (EGR-2012-11-R-0710b); 2012: The global industry for Business
Process Services (BPS) for Banking and Financial Services (BFS) is growing at a fast pace of over 16% annually. After a dip in 2008-09,
due to the global financial crisis, BFS BPS is back on track, seeing rising contract numbers in both 2010 and 2011. Although BPO
services account for only 10% of the overall market for BFS BPS, adoption of BPO is now expanding globally. This report analyzes the
current trends and the future outlook for third-party BPO services for the global banking and capital markets industry
2. Application Outsourcing (AO) in Banking - Service Provider Profiles Compendium (EGR-2012-11-R-0763); 2012: The banking AO
service provider compendium provides comprehensive and fact based snapshots of 25 service providers featured on Everest Group
Banking AO PEAK Matrix. Each more than 5 pages service provider profile provides a comprehensive assessment of their service suite,
scale of operations, domain, investments, and delivery locations specific to banking AO services
For more information on this and other research published by Everest Group, please
contact us:
Rajesh Ranjan, Vice President:
Rajat Juneja, Practice Director:
Rishabh Gupta, Senior Analyst:
Pallavi Saxena, Analyst:
Phone: +1-214-451-3110
Email: info@everestgrp.com
Everest Group
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13455 Noel Road, Suite 2100
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rajesh.ranjan@everestgrp.com
rajat.juneja@everestgrp.com
rishabh.gupta@everestgrp.com
pallavi.saxena@everestgrp.com

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Analytics in banking preview deck - june 2013

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Analytics in banking preview deck - june 2013