Tag

financial services

Unraveling the Complexities of Financial Crime Data Management | Webinar

By | Webinars

Session held live on Wednesday, April 3, 2019 | 11:00 a.m. EST | Hosted by Genpact with featured speaker, Manu Aggarwal, Practice Director, Everest Group

View the Recorded Session

For many risk and compliance executives in the banking industry, high false positive rates and investigation inefficiencies are still their biggest pain points. Meanwhile, the pressure to fight financial crime, cut costs, and reduce inefficiencies continues to escalate.

Join this webinar discussion on why financial institutions need to look beyond these pain points, which are just the “tip of the iceberg”. Together, we will examine how to solve the much more daunting problem of data management that lurks beneath the surface.

Guest Speaker

Manu Aggarwal, Practice Director, Everest Group

Blockchain Adoption Journey and Impact on Financial Services Industry | In the News

By | In The News

Blockchain is increasingly viewed as a ground-breaking technology with potential to disrupt industries by enabling process efficiencies, cost optimization, and building new operating and revenue models. Everest Group research suggests that almost 60% of all blockchain use cases are focused on the financial services industry since the genesis of this technology from the cryptocurrency bitcoin. Some of the use cases of blockchain in financial services are FX settlement, real-time payments, OTC derivatives clearing, P2P lending, cross-border lending, compliance reporting/audit, securities Issuance, P2P insurance, trade finance, KYC as a shared service, event-driven insurance, and core banking.

Read the rest of the article by Ronak in Infosys Insights

Where are Financial Services Jobs Moving to? | In the News

By | In The News

The global financial services sector faces a series of new challenges, from the rapid adoption of automation, increasing regulation and Brexit to protectionist rhetoric in the US. This changing landscape means that traditional outsourcing models are under scrutiny, some roles may disappear and others are shifting to new parts of the world.

Globally, banking and financial services sector (BFS) companies signed US$4.9bn worth of IT and business process outsourcing (IT-BPO) contracts between Q4 2016 and Q3 2017, according to KPMG’s Global IT BPO outsourcing deals analysis. Figures from Everest Group Research reveal that global revenue from the IT-BPO market in BFS is between US$100bn and US$150bn. And the three key low-cost countries of India, the Philippines and Poland employ a total of between 310,000 and 850,000 people in BFS BPO alone.

Read more in The Journal of the Chartered Institute for Securities & Investment

Big Increase in IT Services Spending in Financial Services | Sherpas in Blue Shirts

By | Banking, Financial Services & Insurance, Blog

At the beginning of 2018, we forecasted a bump in discretionary IT services spending in Financial Services. And we predicted banks would spend heavily on technology. But we didn’t forecast as big a bump as is occurring, and the banks are spending more heavily than we anticipated. Why is it important to understand what’s happening here?

Who would be the beneficiaries of that spend? That’s why this spending trend is important.

At the beginning of the year, we said the beneficiaries would be primarily Fintech companies, in-house services, and non-incumbent service providers. However, given the amount of spending we see coming down through the pipeline, we don’t think the fintechs, in-house services and challenger service providers will be able to absorb the spend.

IT Services: Growth Trends in the Financial Services Vertical

Deep Dive Equity Research and Everest Group’s July 31 report, “IT Services: Growth Trends in the Financial Services Vertical,” reveals that the BFSI spend – particularly in banking – is poised to increase dramatically. In fact, we see a 15% increase planned for 2018 at just the top four US banks:

  • JP Morgan indicates it will increase its IT spending by $1.4 billion in 2018.
  • Citigroup plans to spend around $8.0 billion on IT in 2018, or about 20% of the bank’s expense budget, which is an increase over its 2017 spend.
  • Wells Fargo plans a significant spending uptick in technology transformation and data management in 2018.
  • Bank of America plans an incremental $500 million technology investment due to tax-reform benefits.

Initially, we believed that the incumbent technology service providers would not be the beneficiaries of the increased spend. But we now believe there will be a shortage in supply that the fintechs and new-age service providers will not be able to satisfy. We believe the only way to satisfy this shortage is if the incumbent legacy technology service providers of technology – which have been largely left on the sidelines to date – participate.

Yes, the underlying secular forces that we noted at the beginning of the year as growth obstacles for the legacy service providers (revenue compression, a strong DIY movement or insourcing and suboptimal sales model for digital projects) still hinder legacy providers’ growth. But we believe that the enormity of the spend that is coming through the pipeline will create a rising tide that the fintechs and new-age technology service providers will not be able to absorb.

Consequently, we’re upping our forecast for banking spend in 2018 and strongly believe the legacy service providers will be meaningful beneficiaries of this spend.

Anatomy of Digital Transformation in BFS | Sherpas in Blue Shirts

By | Banking, Financial Services & Insurance, Blog, Digital Transformation

Everest Group recently conducted a study with 55 banking and financial services firms to evaluate their digital capabilities in areas including strategy, organization and talent, process transformation, technology adoption, and innovation. Here are the primary insights we collected from that study.

Investments in Digital Technologies are Increasing

More than 60 percent of BFS firms have invested in exploring the various use cases in cognitive- and AI-driven technologies. Typical use cases include helpdesk automation using chatbots and other cognitive capabilities for functions such as sales & marketing, data entry, credit assessment, and information gathering.

The AI Transformation Wave is Hitting the Front-Office

BFS companies are increasingly leveraging AI-enabled transformation in areas where there is significant customer interaction. So personal finance virtual agents, voice assistants for account servicing, voice-based payments and account authentication, and intelligent message-based account servicing are gaining traction. Not surprisingly, Millennials and a new breed of mass affluent (per The Financial Brand, this segment generates up to 70 percent of banks’ and credit unions’ total retail profits, even though they only make up less than 30 percent of the customer base) are extensively using these solutions for advisory and servicing assistance.

BFS Firms are Increasingly Emphasizing Their “Change” Agenda

Our study indicates that BFS firms will increase their digital investments by 9 percent in 2018. This is particularly driven by the need to change in response to the evolving regulatory regime, and customer demand for responsive and agile applications. For example, in the U.S., deregulation could pave the way to a shift in the utility space. In the U.K., the Second Payment Services Directive (PSD 2) has heralded an open banking revolution that forces banks to release their data in a secure and standardized format.

The Talent Gap is a Key Challenge for Digital Adoption

BFS digital skill gaps

Although BFS firms are accelerating their adoption of AI-driven applications, they’re facing significant scaling challenges as digital talent is scarce and in high demand. The biggest talent shortage areas include cybersecurity experts to handle stringent regulatory pushes – such as GDPR in the EU – and those with deep knowledge of big data, without which enterprises can’t realize their full potential in enhancing the technical and functional capabilities of their internal teams on leading big data platforms.

Our Recommendations

To stay ahead of the competition and remain relevant in the market, BFS firms must invest in enhancing the five following capabilities in alignment with their digital journey:

  • Strategy – Outline a clear vision, metrics, and realistic goals for focused and scalable digital adoption
  • Organization and talent – Acquire digital talent through reskilling and retraining existing employees, as well as recruiting talent from outside
  • Technology adoption – Adopt niche digital technologies at speed and scale with higher focus on AI, analytics, security, and risk
  • Innovation – Continually source new ideas for innovation, and embed human-centric design in the organization’s DNA
  • Process reimagination – Transform and automate internal business processes to remove inefficiencies.

Related: Learn more about our digital transformation analyses

The above recommendations translate to a customer-focused triple mandate of Experience, Efficiency, and Ecosystems (E3) for banks. The  evolution from a product-centric to a customer-centric mindset requires an open banking ecosystem to orchestrate the lifestyle services that individuals or enterprises demand from their financial institutions at speed and scale

This metamorphosis will be challenging not only because of the complicated regulatory regimes and resilient legacy structures, but also the rise of non-traditional competitors.

Please feel free to reach out to [email protected] and [email protected] to diagnose your firm’s digital adoption maturity.