Topic: Banking BPO Service Provider Landscape with PEAK MatrixTM Assessment 2013

BFSI BPO Market Report September 2013

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Background and methodology of the research

Background of the research Banking BPO is the largest and the most mature market within BFSI BPO. As financial institutions look to further cut costs, grow beyond traditional markets, and find new channels to reach customers, they are also increasingly turning to BPO as a key tool to stay competitive. Service providers, on their part, are trying to increase market share, develop new offerings, and improve their delivery capabilities, through both organic and inorganic route. With more comprehensive offerings to choose from, banks should assess service provider capabilities across various parameters, and keep in mind both current and future needs when selecting a service provider. Scope and methodology In this research, we analyze the global banking BPO service provider landscape. We focus on: Relative positioning of 17 service providers on Everest Groups PEAK Matrix for banking BPO Service provider capability assessment across key dimensions Emerging service provider trends Implications for key stakeholders

Copyright 2013, Everest Global, Inc. EGR-2013-11-R-0946

This report is based on four key sources of proprietary information

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Proprietary database of 200+ banking BPO 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, Line of Business (LoB) served, and pricing model employed Proprietary database of 17+ BFS BPO 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 LoBs Revenue split by region Location and size of delivery centers Technology solutions developed Service provider briefings Vision and strategy Annual performance and future outlook Key strengths and improvement areas Emerging areas of investment Ongoing buyer surveys and interactions Drivers and challenges for adopting BFSI BPO Emerging priorities Lessons learnt and best practices

List of service providers covered in the analysis

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 Copyright 2013, Everest Global, Inc. EGR-2013-11-R-0946 3

Everest Groups definition of BFSI includes the following three segments

Focus of this report

Banking, Financial Services, and Insurance (BFSI)

Banking

Capital markets

Insurance

Retail financial services (B2C1) Cards Retail banking Lending Commercial banking (B2B2)

Investment banking Asset management Custody & fund administration Brokerage

Life & pensions Property & casualty

Note: This report covers vertical-specific BPO within the banking space. It does not include coverage of horizontal business processes such as F&A, HR, procurement, and contact centers
1 2 Business-to-Consumer relationships Business-to-Business relationships Copyright 2013, Everest Global, Inc. EGR-2013-11-R-0946 4

Summary of key messages (page 3 of 3)

Emerging service provider trends

Growth of banking analytics solutions Service providers are focusing on analytics solutions to help banks manage Big Data, glean customer insights, and manage risk better Investments in mortgage BPO solutions Origination and end-to-end mortgage processing capability are becoming important as the mortgage market begins to recover Technology tools to support mortgage BPO are also becoming important and service providers are investing in acquiring them The continued importance of regulatory reporting in banking BPO The continued importance of regulatory reporting and risk management is creating strong demand for service providers in this area
4 1 Analytics 5 Social media and mobility solutions Emerging service provider trends in banking BPO 3 Regulatory reporting 2 Mortgage BPO

The flattening of global services As banks expand globally, service providers are increasing their nearshore and onshore footprint to address rising demand of services in varying delivery constructs The emergence of social media and mobility solutions Service providers focus on offering social media solutions to help banks improve customer engagement and grow revenue As banks begin turning towards mobile payments as an alternative to traditional payment methods, mobility solutions are becoming a key need
Copyright 2013, Everest Global, Inc. EGR-2013-11-R-0946

Global services

Implications of key trends for buyers and service providers

Banking BPO market insights

Implications for banking BPO buyers

Implications for banking BPO service providers

Leaders overall market share is decreasing Competitive intensity is rising Top two service providers market share fell in 2012

Banking BPO provider options are increasing; buyers now have an upper hand in determining the bestfit for their operating model Think about leveraging BPO service providers as partners in driving rapid expansion in new geographies Evaluate providers capabilities to offer risk management services and fit with own operating model Carefully evaluate providers technological capabilities to ensure desired business outcomes

Building capabilities (scale, scope, technology, and delivery footprint) is paramount to differentiate Play a more strategic role in clients expansion plans and create enhanced value propositions Invest in building capabilities to address holistic needs around risk management and regulatory reporting Build expansive technological tools portfolio, offering a wide scope of solutions to meet buyer needs

Rising demand from Asia Pacific Contracts involving Asia Pacific are on the rise

Increasing importance of risk management and regulatory reporting Financial Institutions are adapting to increasing regulatory mechanisms and risk management laws Increased play of technology-bundled BPO Banking BPO is increasingly becoming a technology-enabled play the share of deals involving technology support is going up Leaders on the banking BPO PEAK Matrix may not always be the best solution PEAK Matrix categorizes service providers based on overall market success and delivery capability It provides a fact-based overview of the overall market

PEAK Matrix should be augmented with organizationspecific contextual requirements to determine the short-listed providers. One-on-one workshops should then be conducted with short-listed providers to determine the best-fit
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Copyright 2013, Everest Global, Inc. EGR-2013-11-R-0946

Service providers are positioned on PEAK Matrix based on evaluation across two key dimensions

Leaders Market success Measures success achieved in the market. Captured through banking BPO revenue Major Contenders

Emerging Players Delivery capability Measures ability to deliver services successfully. Captured through four subdimensions

Scale Measures the scale of operations (overall company revenue, banking BPO revenue, number of FTEs, number of clients etc.)

Scope Measures the scope of services provided across segments, processes, industries, geographies, etc.

Technology Measures the capability and investment in tools and technologies that help deliver better services

Delivery footprint Measures the delivery footprint and the global sourcing mix through delivery footprint across onshore, nearshore, and offshore locations

Copyright 2013, Everest Global, Inc. EGR-2013-11-R-0946

Everest Group PEAK Matrix 2013 banking BPO market standings Performance | Experience | Ability | Knowledge
Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix for banking BPO1 75th percentile 75th percentile High Major Contenders Mphasis Market success Sutherland Global Services 25th percentile iGATE HCL Emerging Players CSC Dell Tech Mahindra Syntel Low Low 25th percentile Banking BPO delivery capability (Scale, scope, technology, and delivery footprint)
1 Service providers scored using Everest Groups proprietary scoring methodology on page 19 Note: Accenture, HP and IBM also have credible scale in banking BPO but did not provide information to be featured on the PEAK Matrix Source: Everest Group (2013) Copyright 2013, Everest Global, Inc. EGR-2013-11-R-0946 8

Leaders Major Contenders Emerging Players

Genpact Xerox Serco Cognizant

Leaders TCS

Star Performers1

Infosys EXL Wipro

WNS

High