In this report, Technavio covers the present scenario and growth prospects of the Global Outsourcing Market in the BFSI Sector 2016-2020. To calculate the market size, the report covers outsourcing deals in leading regions such as Americas, EMEA, and APAC.
“In terms of outsourcing deals by volume within the insurance sector, the general insurance segment held the majority share of the market, accounting for around 55%-60% in 2015. The health and life insurance segment held 35%-40%, while the others segment made up 5%-10% of the market in the same year,” said Amit Sharma, one of Technavio’s lead industry analysts for ITO and BPO research.
“Technavio researchers expect outsourcing deals in the financial services sector to increase during the forecast period due to a substantial rise in middle-office and back-office outsourcing with more market players looking to leverage ITO to streamline business operations and gain a competitive edge,” added Amit.
Global outsourcing market in the BFSI sector by geography
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Americas: largest market for the global outsourcing market in the BFSI sector
In 2015, North America was one of the key contributors to the global outsourcing market in the BFSI sector. This is attributed to factors such as continuous regulatory and economic volatility challenges faced by financial organizations in the region.
The implementation of acts and reforms such as Dodd-Frank Act, Volcker Rule, HIPAA, Securitization Reform, Consumer Protection Reform, and Credit Rating Agency Reform has led financial institutions to outsource their business processes.
The US is the key leading country in this market, as many service providers in the US extend extensive financial services support to clients to meet their regulatory and financial requirements.
EMEA: second largest market for the global outsourcing market in the BFSI sector
Factors such as increased pressure to improve operational efficiencies and uncertain regulatory environment are driving market growth in EMEA.
EMEA has gained much importance as an insurance and capital BPO destination because of the region’s proximity to outsourcing clients in the US and Europe. Also, outsourcing insurance and capital market functions to this region results in lower turn-around time, improvements in service quality, and higher customer satisfaction.
The UK was the leading country in this market with the country experiencing domestic outsourcing trends and grabbing most deals from clients in the US and Europe.
Outsourcing market in BFSI sector in the APAC region
Factors such as the availability of a large talent pool and high-quality service offerings at affordable costs have boosted market growth in APAC. Also, the scalability of ITO and BPO operations in countries such as India, China, and the Philippines makes these countries attractive outsourcing destinations in the region.
Credit card processing, call center, disaster recovery, and data processing are some of the major BPO businesses in APAC. The region remains the most cost-effective application outsourcing service delivery location.
However, BPO destinations are now moving from mature markets such as India, China, and the Philippines to emerging countries such as Thailand and Indonesia. Advantages offered by these countries include low attrition rates, an adequate talent pool, good ICT infrastructure, and a stable political and economic environment for BPO operations. We expect APAC to see a much higher investment in the BPO market than in the Americas and EMEA.
Browse related reports:
- Global Payroll Outsourcing Market 2016-2020
- IT Outsourcing Market in APAC 2016-2020
- Global Middle Office Outsourcing Market 2015-2019
- Global IT Outsourcing Market 2015-2019
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