Robotic process automation, analytics and consumer-facing technology solutions will sustain 5-9 percent growth in banking BPO market through 2020
The proverbial advice “if you can’t beat them, join them” is particularly apropos for banks who find themselves competing against FinTechs (financial technology companies) in the digital age, according to Everest Group in newly published research addressing the business process outsourcing (BPO) market in the banking industry.
Everest Group reports that the traditional banking model with its legacy technologies and ways of doing business has reached the end of the growth curve, so banks must now focus on new technologies to survive. To remain relevant in an evolving market of new-age consumer preferences and unprecedented external pressures, banks are turning to technology solutions such as robotic process automation (RPA), analytics, artificial intelligence (AI), open application programming interfaces (APIs) and blockchain to decrease costs, improve operational efficiency, offer more personalized solutions, and deliver a seamless digital experience to customers.
In some cases, banks are building these technological capabilities in-house, but in many cases, banks are turning to service providers and making allies of former FinTech competitors in order to survive in the ecosystem and offset marketplace challenges.
“Banks can combine their strengths—such as access to resources, trust of customers, and expertise in core banking services—with the innovative offerings of technology players to cope with the significant challenges they are facing in the marketplace,” explained Anupam Jain, practice director at Everest Group. “This is why we are seeing a sustained growth rate of 5 to 9 percent in banking BPO. Service providers are supporting banks by leveraging their expertise in technologies such as analytics and blockchain. And we’re also seeing banks establish collaborative, win-win partnerships with FinTech players who have deep technological assets. This will be a dominant strategy for the bank of the future.”
These results and other findings are explored in Everest Group’s recently published report: Banking BPO Annual Report 2017: Disruption Does Not Discriminate — Banks Embracing Digital to Stay Relevant. The report provides comprehensive coverage of the global banking BPO market, including detailed analysis of the state of the market and challenges faced by banks, market size and adoption by lines of business (LoBs), technology adoption, and the future outlook for banks.
Other key findings:
- The global banking BPO market is expected to grow at a steady pace of 5-9 percent over 2016-2020.
- While North America continues to be the most significant market for banking BPO, Continental Europe and Asia Pacific have witnessed significant growth.
- Bank LoBs are facing challenges to remain profitable with the pressure of regulations, competition from non-banks and rising expectations of customers.
- The overall BPS industry has witnessed significant RPA adoption; however, its adoption in the banking BPO industry remains low.
- Analytics in BFSI (the banking, financial services and insurance market) is starting to differentiate in its usage, and BFSI is poised to remain the largest market for analytics.
***Download complimentary report abstract here***