Tag: Banking and Financial Services

Multi-Process Human Resources Outsourcing (MPHRO) Services PEAK Matrix® Assessment 2023

Multi-Process Human Resources Outsourcing (MPHRO) Services

In today’s Volatile, Uncertain, Complex, and Ambiguous (VUCA) world, organizations are constantly seeking ways to optimize their operations and enhance their overall efficiency. The ongoing talent shortage, surging inflation, a recessionary environment, and geopolitical instability, coupled with the volatility that the pandemic has caused, have increased enterprises’ openness to leveraging third-party provider support for their HR function. The drive for digital transformation, increasing numbers of first-time outsourcers, and rising demand for next-generation technology and high-end Human Resource Outsourcing (HRO) work from mature outsourcers are expected to continue driving market growth in 2023.

MHRO2023

What is in this PEAK Matrix® Report

In this report, we analyze 17 providers on the Everest Group PEAK Matrix® for Multi-Process Human Resource Outsourcing (MPHRO) Services and categorize them as Leaders, Major Contenders, and Aspirants. The research will help providers benchmark their capabilities against competitors, while buyers will be able to evaluate the different providers based on their sourcing needs.

In this report, we examine:

  • The dynamics of the MPHRO service provider landscape
  • A deep-dive analysis of providers based on their market impact and vision and capability
  • Everest Group’s PEAK Matrix® evaluation of MPHRO service providers
  • Top MPHRO service providers across geographies and industries
  • MPHRO service providers’ key strengths and limitations

Scope:

  • All industries and geographies
  • The assessment is based on Everest Group’s annual RFI process for the calendar year 2023, interactions with leading MPHRO providers, client reference checks, and an ongoing analysis of the MPHRO market
  • MPHRO deals that encompass a minimum of three HR processes
  • The deals considered involve a buyer employee size of 1,000 or more

 

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What is the PEAK Matrix®?

The PEAK Matrix® provides an objective, data-driven assessment of service and technology providers based on their overall capability and market impact across different global services markets, classifying them into three categories: Leaders, Major Contenders, and Aspirants.

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Identity and Access Management (IAM) Services PEAK Matrix® Assessment 2023

Identity and Access Management (IAM) Services PEAK Matrix® Assessment

The demand for Identity and Access Management (IAM) services in the global business landscape is accelerating due to digital transformation trends, the importance of data protection, and the complexities of managing IT environments. The need for effective IAM solutions has intensified with the implementation of BYOD (Bring Your Own Device) policies, cloud-based services, and ongoing cyber threats.

To address the shortage of in-house IAM expertise, companies are adopting external IAM services. This allows organizations to reduce CAPEX and OPEX associated with maintaining an internal IAM team while ensuring efficient and secure management of digital identities. Additionally, as governments worldwide enforce stricter data protection and security regulations, enterprises face pressure to comply with these regulations and adhere to localized data privacy laws. Examples include Europe’s GDPR, California’s CCPA, and Brazil’s LGPD, reflecting the evolving regulatory landscape. Consequently, global enterprises are seeking providers capable of delivering sophisticated, adaptable, and globally compliant IAM services. Key areas of interest include user authentication and authorization, centralized IAM operations, integration of IT/OT IAM services, and regulatory compliance assessments.

IAMSERVICESPEAK

What is in this PEAK Matrix® Report

In this report, we present a comprehensive analysis of 21 global IAM service providers as featured on the IAM Services PEAK Matrix® Assessment 2023. The research will help buyers select the right-fit provider for their needs, while providers will be able to benchmark themselves against each other.

In this report, we examine:

  • IAM services PEAK Matrix® characteristics
  • Enterprise sourcing considerations
  • Providers’ key strengths and limitations

Scope:

  • All industries and geographies
  • Services: IAM
  • The assessment is based on Everest Group’s annual RFI process for the calendar year 2023, interactions with leading IAM service providers, client reference checks, and an ongoing analysis of the IAM services market

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Banking Operations – Services PEAK Matrix® Assessment 2023

Banking Operations – Services PEAK Matrix® Assessment

The banking operations market has become relatively consolidated at the top, with the leading participants capturing a larger share of the market. Additionally, specialists have entered specific banking segments. Lines of business such as cards and payments and retail banking are growing significantly. Enterprises are focusing on becoming future-ready, agile, and resilient to manage volume fluctuations and staff shortages.

Providers are differentiating themselves by offering as-a-service models and focusing on digital transformation solutions by leveraging analytics, automation, and AI, combined with industry expertise and an advisory-led approach. Additionally, they are leveraging the partnership ecosystem and making new acquisitions to enhance their capabilities and improve the time-to-market of their offerings. Buyers are increasingly partnering with participants capable of providing holistic support in the form of proactive guidance on industry best practices, customer experience design, and faster, cheaper, and better transformative models.

BOperations 1

What is in this PEAK Matrix® Report

In this report, we analyze 34 banking operations service providers and position them on Everest Group’s PEAK Matrix® as Leaders, Major Contenders, and Aspirants based on their capabilities and offerings. The report will assist key stakeholders, such as banks, financial institutions, and providers, in understanding the current banking service provider landscape and make informed sourcing and partnership decisions.

This report features 34 banking operations service provider profiles and includes:

  • Providers’ relative positioning on Everest Group’s PEAK Matrix® for banking operations
  • Providers’ market impact
  • Providers’ vision and capability assessment across key dimensions
  • Enterprise sourcing considerations

Scope:

  • Industry: Banking and Financial Services (BFS)
  • Geography: global
  • The report covers vertical-specific banking operations and does not include horizontal business processes such as Finance and Accounting (F&A), HR, procurement, and contact center
  • This assessment is based on Everest Group’s annual RFI process and an ongoing analysis of the banking operations industry

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What is the PEAK Matrix®?

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Payments IT Services PEAK Matrix® Assessment 2023

Payments IT Services PEAK Matrix® Assessment

The payments landscape is changing rapidly. Today, consumers have more payment options than ever before. This is primarily due to the unprecedented rise of FinTechs, PayTechs, and neo-banks, which introduce faster, innovative, and convenient transaction methods such as Buy Now Pay Later (BNPL), digital wallets, Request to Pay (R2P), embedded payments, and digital currencies. The increasing prevalence of digital payments and the consumer demand for seamless instant transactions are driving the adoption of real-time payments systems.

New regulations and standards, such as ISO 20022, are paving the way for faster and more efficient payments. These new data standards create numerous opportunities for data monetization. Financial institutions are investing in modernizing payment infrastructure to support instant payments, leverage monetization opportunities, provide alternative payment methods, and launch digital currencies.

Payments IT Services PEAK 2023 1

What is in this PEAK Matrix® Report

In this report, we examine the vision and capability and market impact of 30 payments IT service providers and position them on Everest Group’s proprietary PEAK Matrix® framework as Leaders, Major Contenders, and Aspirants.

In this report, we:

  • Examine key trends in the payments IT services industry
  • Classify 30 payments IT service providers as Leaders, Major Contenders, and Aspirants on Everest Group’s proprietary PEAK Matrix® framework
  • Discuss the IT service providers’ competitive landscape for payments IT services in BFS
  • Assess providers’ key strengths and limitations

Scope:

  • Industry: Banking and Financial Services (BFS)
  • Geography: global
  • The assessment is based on Everest Group’s annual RFI process for the calendar year 2023, interactions with leading technology and IT services providers, client reference checks, and an ongoing analysis of the payments IT services market

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Continuous Modernization in an Era of Cost Efficiency: Perspectives for BFS Firms in APAC | Webinar

on-demand WEBINAR

Continuous Modernization in an Era of Cost Efficiency: Perspectives for BFS Firms in APAC

The Asia Pacific (APAC) macroeconomic environment has experienced considerable ups and downs; additionally, banking and financial services (BFS) firms are up against the dual challenge of bringing in cost efficiencies while staying current with the latest technologies.

Amid these ongoing challenges, the paradigm of modernization is shifting from a point-in-time activity to continuous evolution. 

In this webinar, our experts will discuss how, in an era where cost savings is critical, continuous modernization for BFS firms is key.

Our speakers will discuss:

  • What are the key business, technology, and sourcing priorities of BFS firms in Asia Pacific as they accelerate their modernization journey?
  • What is the current state of maturity, and what are the primary challenges for the modernization of banking systems in APAC?
  • What are the key considerations and best practices to modernize core systems in an era of conservative budgets?

Who should attend?

  • CIOs and CTOs
  • IT strategy heads
  • Heads of outsourcing
  • Procurement managers
  • Senior marketing executives
  • Heads of BFS division
  • BFS solutions heads
  • Senior IT applications executives
  • Senior IT sales executives
  • BFS products heads
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SVB Aftermath: How Will the Bank Failures Impact the Technology Services Industry? | Blog

With the recent banking implosion, the global financial services industry, technology companies, and service providers will be hit in different ways. Let’s explore the reverberations of these concerning banking trends.

The failure of Silicon Valley Bank (SVB) along with Silvergate and Signature Bank raises the question: Are these isolated incidents or signs of greater trouble in the financial services industry signaling a recession in the US? We believe this will start a domino effect impacting banking regulations, profitability, and technology spend.

The recent collapse of the banks will have repercussions across the financial services system and may trigger the following aftermaths:

  • Opportunities for large banks to capture business from banks with similar concentration sector risks of sectors that are seeing slowdowns (e.g., the start-up and tech concentration for SVB)
  • Rising mergers and acquisitions (M&As) to counter concentration risks and take advantage of current banking valuations, especially in the mid-market and regional banking segments
  • Reversing rate hikes by the Federal Reserve could bring about a multi-fold impact, as most organizations have planned their business strategy with the assumption of additional hikes for rates in 2023
  • Tightening of spend across organizations to manage near-term profitability. This could also cause spending slowdowns this quarter for IT outsourcing suppliers. Discretionary spending also will dry up, and decisions on new large modernization deals will be delayed
  • Declining revenues and loss of business in the current and following quarters for IT outsourcing suppliers catering to these banks

After the dust settles, these bank collapses can bring about the following two key learnings in the long term:

  1. Data and analytics and Artificial Intelligence (AI) technologies could play a key role in better risk management (e.g., for the SVB asset-liability mismatch issue) to predict similar risk scenarios and prevent future failures
  2. Additional stress test scenarios can help avoid future bank runs on non-SIFI institutions

Banking trends and impact

As the events played out, Moody’s downgraded its view on the US banking system from stable to negative, citing a rapidly deteriorating operating environment. Banks with sector-specific concentration risks, specializing in two or three sectors, have grown deposits in the last couple of years and also have a higher percentage of customers with average deposits exceeding the FDIC-insured limit, putting them at higher risk.

These banks will need to assess their portfolios and provide assurance to their customers. Even with these guarantees, customers still may decide to change their banking partners and seek traditional large banks that have more liquidity, impacting regional and smaller banks’ growth.

Declining customers and subsequent deposits will also affect other banking portfolios, and digital and technology transformation spend may take a hit. Banks’ risk management functions also will be scrutinized again. For example, only one of the seven members of SVB’s Risk Committee had risk management experience.

Implications for the financial services industry

The global financial services industry also could be impacted. Other geographies like Japan and the UK are showing signs of distress with banks of similar portfolios and exposures.

The bank failures could have a lasting impact on the sector as the financial services industry restructures and implements new processes to avoid similar scenarios, including:

  • Stricter stress testing rules to prevent further risk to the nation’s financial stability
  • Increased frequency and number of stress testing within banks as they reassess their portfolios and plan for any asset-liability mismatches
  • Greater focus on banking governance in the US triggered by the questions raised over systemic risk exemptions for SVB and Signature
  • Layoffs and hiring freezes as the industry becomes more prudent and conservative
  • Larger banks taking business from banks that have similar risk issues and might struggle
  • Rising M&As, especially in the mid-market and regional banking segments

Opportunities for providers

Here are our recommendations on how technology and service providers can capitalize on these new banking trends:

  • Adopt a multi-stakeholder approach with large banks: More than half of the business and financial services (BFS) technology spend comes from Tier 1 banks, and we expect investments by these market giants to remain strong and even expand to address the ripple effects. Providers should adopt a multi-stakeholder approach to target risk and compliance, marketing, operations, technology, and business unit leaders who all might course correct their strategies (in response to potential Federal Reserve reverse rate hikes, products being stress tested, new ones being launched, increased regulatory reporting activity, etc.)
  • Prioritize accounts for small and mid-size banks and credit unions: Service providers need to re-prioritize their account strategy for these banks as they renew priorities and focus areas. We expect overall spending by small- and mid-size banks to decline, making it critical for providers to identify and pursue the right accounts with the most relevant messages (based on the level of financial health)
  • Reenergize pre-COVID cost-takeout playbooks with next-gen elements: As banks come under immense margin pressure, some asset takeovers and carve-out opportunities may arise. A solutions mindset will resonate more soundly with clients than a pure talent-led play. Providers should plug gaps by working with technology partners and/or bring in-house technology assets.

We expect an increase in offshoring intensity and a push for captive setup conversations through a build-operate-transfer (BOT) model approach. Service providers should watch the direction of US dollar prices as commercials will need to be revised for the foreign exchange (FX) impact (the double impact of potential rate reversal and wage inflation)

  • Support clients on product/portfolio diversification strategies (long-term): BFS firms entering and/or expanding their asset and wealth management business as part of their revenue diversification plan will spike. We hold onto our growth forecast in this segment with renewed affirmation from the market
  • Pivot to growth pockets that will be less impacted: Not all lines of businesses will be equally affected. There’s a glimmer of hope for a revival in investment banking, private equity, treasury, and brokerage spending on technology outsourcing. However, cards and payments will stay flat, and lending might struggle

Looking ahead, BFS firms will cautiously approach technology and outsourcing spending, resulting in another quarter of soft demand. We also expect increased medium-term regulatory actions leading to spending increases across risk and compliance functions for non-SIFIs.

Rippling effects across geographies

The recent bank failures have an underlying mix of bank-specific (micro) and macro-economic factors in play. The macro factors have the potential to increase fear in the markets (and depositors) as government bond yields have shown signs of reversing their course, and the added factors of slower economic recovery, inflation, high-interest rates, and the resulting layoffs in specific sectors add further pressure.

Credit Suisse saw a 20% fall in share price on fears of a liquidity crunch on March 15. This also impacted shares of other European banks, such as BNP Paribas, Societe Generale, Commerzbank, and Deutsche Bank falling between 8% and 10%.

We are closely observing the market and regulatory actions and are available for any questions you or your teams might have about the impact of these latest banking trends. Please reach out to Ronak Doshi, [email protected], Kriti Gupta, [email protected], or Pranati Dave, [email protected].

Learn about key trends and the outlook for the global services market in 2023 in our webinar, Global Services: Lessons from 2022 and Key Trends Shaping 2023.

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