Everest Group PEAK MatrixTM for Property and Casualty ... · PDF fileassessment of retail...
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Everest Group PEAK Matrix TM for Retail Banking BPO Service Providers Focus on TCS January 2017 Copyright © 2017 Everest Global, Inc. This document has been licensed for exclusive use and distribution by TCS EGR-2017-11-E-2067
Transcript of Everest Group PEAK MatrixTM for Property and Casualty ... · PDF fileassessment of retail...
Everest Group PEAK MatrixTM for Retail Banking BPO
Service Providers
Focus on TCS
January 2017
Copyright © 2017 Everest Global, Inc.
This document has been licensed for exclusive use and distribution by TCS
EGR-2017-11-E-2067
2Copyright © 2017, Everest Global, Inc.
EGR-2017-11-E-2067
Everest Group recently released its report titled “Retail Banking BPO – State of the Market with PEAK Matrix™
Assessment 2016: Analytics and Innovation at the Forefront in Challenging Times”. This report analyzes the
changing dynamics of the retail banking BPO landscape and assesses service providers across several key
dimensions.
As part of this report, Everest Group classified 19 service providers on the Everest Group Performance |
Experience | Ability | Knowledge (PEAK) Matrix for retail banking BPO into Leaders, Major Contenders, and
Aspirants. The PEAK Matrix is a framework that provides an objective, data-driven, and comparative
assessment of retail banking BPO service providers based on their absolute market success and delivery
capability.
Based on the analysis, TCS emerged as a Leader. This document focuses on TCS’s retail banking BPO
experience and capabilities. It includes:
TCS’s position on the Everest Group retail banking BPO PEAK Matrix
Detailed retail banking BPO profile of TCS
Buyers can use the PEAK Matrix to identify and evaluate different service providers. It helps them understand
the service providers’ relative strengths and gaps. However, it is also important to note that while the PEAK
Matrix is a useful starting point, the results from the assessment may not be directly prescriptive for each
buyer. Buyers will have to consider their unique situation & requirements, and match them against service
provider capability for an ideal fit.
Introduction and scope
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Everest Group’s view of the retail banking BPO value
chain
Regulatory reporting and compliance
Analytics
Risk management
Account opening
Client onboarding and set up
Deposit acquisition
Account maintenance
Account closures
Transaction processing &
account servicing
Dispute resolution
Reconciliations
Account fraud management
Reconciliation & fraud
management
Retail banking
4Copyright © 2017, Everest Global, Inc.
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Everest Group PEAK Matrix – 2016 retail banking
BPO market standings
Performance | Experience | Ability | Knowledge
1 Service providers scored using Everest Group’s proprietary scoring methodology
Note: Service provider assessments are based on data collected through December 31, 2015. Any changes in capabilities due to M&A activity after this date are not
reflected in the current analysis
Source: Everest Group (2017)
Leaders
Major Contenders
Aspirants
Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix¹ for retail banking BPO
75th percentile
Retail banking BPO delivery capability
(Scale, scope, technology solutions and innovation, and delivery footprint)
Mark
et
su
cces
s
(Revenue
, nu
mber
of clie
nts
, and
revenu
e g
row
th)
High
Low
Low High
25
thp
erc
en
tile
25th percentile
75
thp
erc
en
tile
Leaders
Major Contenders
Aspirants
TCSGenpact
Wipro
HCL
Avaloq
Concentrix
Intelenet
HPMphasis
Sutherland Global Services
Infosys
EXL
AccentureCapgemini
WNS
Tech Mahindra
NIIT
Xchanging
Polaris
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TCS (page 1 of 7)
Everest Group assessment1
1 Based on contractual and operational information as of December 2015
Source: Everest Group (2017)
Delivery capability
Market successScale Scope
Technology and
innovation Delivery footprint Overall
Leaders Major Contenders AspirantsMeasure of capability: Best-in-class Not mature
TCS earns a high and fast-growing revenue from its healthy
client base
It has a balanced mix of revenue across mature and emerging
geographies and a range of buyer sizes, which mitigates
concentration risk
It offers a suite of both platform-based and augmentation-based
offerings
TCS can broaden its process coverage beyond its current focus
on transaction processing and account servicing, to include
increasingly critical processes such as fraud management
Its services are currently delivered predominantly from offshore
locations in India. It should focus on achieving a more global
delivery footprint
Strengths Areas of improvement
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TCS (page 2 of 7)
Retail banking BPO – overview
Recent acquisitions and partnerships
2015: Partnership with a global regulatory reporting leader for a
regulatory reporting solution
Recent developments
2015: Developed banking-specific RPA components
2015: Developed a digitized decision engine workflow and
operational dashboard
2015: Created a pool of AML, RPA, BPM, and BA resources to
meet clients’ changing requirements
2015: Created collaborative IT-BPS solutions including a web-
based debt management solution
2015: Deployed an imaging solution for efficient transaction
processing
2014: Building financial spreading, legal account remediation,
and KYC capability in commercial and retail banking in terms of
people and processes
Suite of services
Payments
Personal banking
Branch operations
Deposits & item processing
Remediation
Regulatory
Reconciliations
Analytics and customer experience management
2013 2014 2015
Revenue (US$ million) 100+ 115+ 140+
Number of FTEs 3,900+ 4,075+ 4,975+
Number of clients 4 8 13
Company overview
Tata Consultancy Services (TCS) is an IT services, consulting, and business
process services organization. It has over a decade of experience in providing
end-to-end services across retail banking.It offers BaNCS platform solution for all
lines of business.
Key leaders
Dinanath Kholkar, Global Head, Business Process Services
Arun Batra, Global Head, BFSI BPS
Headquarter: Mumbai, India
Website: www.tcs.com
Source: Everest Group (2017)
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TCS (page 3 of 7)
Retail banking BPO – key delivery locations
Cincinnati
Guadalajara
Quito
Santiago
Gurgaon
MumbaiBengaluru Chennai Manila
Kolkata
Gandhinagar
PuneDoha
Source: Everest Group (2017)
Lima
Kochi
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TCS (page 4 of 7)
Retail banking BPO – capabilities and key clients
Key retail banking BPO engagements
Client name Region Client since
Top three banking & financial services provider United Kingdom 2015
Global Fortune 50 retail banking group United Kingdom 2014
Leading European multinational bank Europe 2014
Leading bank in Canada United States 2011
Leading bank in Middle East Middle East and Africa 2011
Fortune 500 financial services annuity provider United States 2009
3%13%
1 Buyer size is defined as large (>US$10 billion in revenue), medium (US$5-10 billion in revenue), and small (<US$5 billion in revenue)
Note: Based on contractual and operational information as on December 2015
Source: Everest Group (2017)
Retail banking BPO FTE mix by
segment
FTEs in numbers
73%
18%
9%
Retail banking BPO FTE split by
delivery location
FTEs in numbers
Retail banking BPO revenue mix by
geography
Revenue in US$ million
Retail banking BPO number of
contracts by buyer size1
Number of active contracts
29%
27%
24%
9%
7%4%
67%
33%46%
38%
16%
UK
APAC
Offshore Small
Medium
LargeDeposits acquisition
Reconciliation
& fraud
management
Transaction processing
& account servicing
100% = 4,975+ 100% = 140+ 100% = 4,975+ 100% = 13
Nearshore
North America
LATAM
MEA
Continental Europe
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Application Year launched Description No. of BPO clients
TCS risk &
compliance solution
2014 A tool that facilitates testing of transactions against business requirements, policies,
and regulations for purposes of quality control, Operational Risk Management (ORM),
and quality assurance / compliance assessment
N/A1
Robotic Process
Automation (RPA)
2014 A solution that is a suite of self-learning, non-intrusive robots, developed to address all
possible business process scenarios
<10
Reconciliation
platform
2012 TCS reconciliation/settlement tool for banking and cards <3
TRAPEZETM 2011 A solution that enables transition, delivery, transparency, and value creation for
customers. The solution set includes banking suite, transition manager, process
management suite, governance suite, knowledge management suite, document
manager, business continuity manager, and analytics platform
>20
TCS BaNCS 2006 A suite of solutions for banks, insurance companies, and diversified financial
institutions. It encompasses an array of pre-configured, customizable banking products
such as digital banking, universal banking, core banking, payments, compliance,
financial inclusion, Islamic banking, and treasury
<3
TCS (page 5 of 7)
Retail banking BPO – technology solutions/tools
1 Not available
Source: Everest Group (2017)
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Risk management support Details No. of BPO clients
Credit risk TCS is engaged in multiple activities to support the following:
Pre- and post-sanction decision making
Credit operations including, but not limited to, static data maintenance, facility setting up, and
customer hierarchy maintenance
Model validations
Senior management and regulatory reporting
<5
Operations risk • TCS provides consulting and execution services for designing ORM framework and testing
business process controls
• These controls and tests are mapped against business requirements, policies, and regulations
• The services also cover designing and implementation of supplier risk management framework
<10
Market risk TCS supports market risk production activities such as:
• Market data time series sourcing, cleansing, and validation. It also supports scenario generation
• Validation and reporting of sensitivities, Value at Risk (VaR), and economic capital reporting
• Basel Committee on Banking Supervision (BCBS) and MIS reporting
<5
Liquidity risk • Reporting on liquidity position across debt, equity, FX, derivatives, loans, and deposits asset
classes
• Computing maximum cash outflows for the business at asset level and performing stress testing
on them
<3
Regulatory risk Managing regulatory risk by offering best-in-class solutions related to CFPB and Fair Debt Collection
Practices Act (FDCPA) regulations, and related to KYC, Foreign Account Tax Compliant Act
(FATCA), and AML sanctions
<10
Risk Analytics TCS has extensive experience in risk analytics covering credit, fraud, operationa, and market risk
Risk scorecard development
Model validation
Economic capital modeling and stress testing
Fraud alert and reporting
10
TCS (page 6 of 7)
Retail banking BPO – risk management and regulatory reporting
Source: Everest Group (2017)
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TCS (page 7 of 7)
Retail banking BPO – risk management and regulatory reporting
Regulatory reporting support List of regulations Description No. of BPO clients
U.S. regulations Office of the
Comptroller of the
Currency (OCC),
Dodd-Frank Act, and
Comprehensive
Capital Analysis and
Review (CCAR)
OCC reporting-related functions across multiple products
Implements regulatory reporting tool for CCAR reporting of a large
Europe-based bank
>3
UK regulations Financial Services
Authority (FSA)
requirements
Implemented regulatory reporting tool for a large United States bank for
their FSA reporting
>3
EU regulations European Market
Infrastructure
Regulation (EMIR)
Supports a large European bank in EMIR compliance >3
Local regulations SSHR (Netherlands) Offers tools-based support for a European bank in its local regulatory
reporting
>3
Source: Everest Group (2017)
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Appendix
13Copyright © 2017, Everest Global, Inc.
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Everest Group classifies the retail banking BPO service
provider landscape into Leaders, Major Contenders,
and Aspirants on the Everest Group PEAK Matrix
1 Service providers scored using Everest Group’s proprietary scoring methodology
Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix1
Top Quartile performance
across market success
and capability2nd or 3rd quartile
performance across market
success and capability
4th quartile performance
across market success
and capability
High
Low
25
thp
erc
en
tile
75
thp
erc
en
tile
75th percentile
Mark
et
su
ccess
(Re
venue, num
ber
of
clie
nts
, and r
evenue g
row
th)
Aspirants
Leaders
Major Contenders
Retail banking delivery capability
(Scale, scope, technology solutions & innovation, and delivery footprint)
Low High25th percentile
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Service providers are positioned on PEAK Matrix
based on evaluation across two key dimensions
Measures the scope of
services provided across
processes, geographies,
and buyer sizes
Measures the capability
and investment in
technology solutions and
ability to deliver value-
added services
(innovation) with high
technology leverage
Measures the delivery
footprint across regions
and the global sourcing
mix
Measures success achieved in
the market. Captured through
retail banking BPO revenue,
number of clients, and
YoY growth
Measures ability to deliver services successfully.
Captured through four subdimensions
Measures the scale of
operations (overall
company revenue and
relative focus on the
vertical)
Scale Scope Technology Delivery footprint
Aspirants
Leaders
Major Contenders
Mark
et
su
ccess
Delivery capability
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Does the PEAK Matrix assessment incorporate any subjective criteria?
The Everest Group’s PEAK Matrix assessment adopts an objective and fact-based approach (leveraging service
provider RFIs and the Everest Group’s proprietary databases containing providers’ deals and operational capability
information). In addition, these results are validated / fine-tuned based on our market experience, buyer interaction,
and provider briefings
Is being a “Major Contender” or “Aspirant” on the PEAK Matrix an unfavorable outcome?
No. PEAK Matrix highlights and positions only the best-in-class service providers in a particular functional/vertical.
There are a number of providers from the broader universe that are assessed and do not make it to the PEAK
Matrix at all. Therefore, being represented on the PEAK Matrix is in itself a favorable recognition
What other aspects of the PEAK Matrix assessment are relevant to buyers and providers besides the “PEAK
Matrix position”?
The PEAK Matrix position is only one aspect of the Everest Group’s overall assessment. In addition to assigning a
“Leader”, “Major Contender” or “Aspirant” title, Everest Group highlights the distinctive capabilities and unique
attributes of all the PEAK Matrix providers assessed in its report. The detailed metric level assessment and
associated commentary is helpful to the buyers in selecting particular providers for their specific requirements. It
also helps providers showcase their strengths in specific areas
What are the incentives for buyers and providers to participate / provide input to the PEAK Matrix research?
Participation incentives for buyers include a summary of key findings from the PEAK Matrix assessment
Participation incentives for providers include adequate representation and recognition of their capabilities/success in
the market place, and a copy of their own “profile” that is published by Everest Group as part of the “compendium of
PEAK Matrix providers” profiles
FAQs (page 1 of 2)
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What is the process for a service provider to leverage their PEAK Matrix positioning status ?
Providers can use their PEAK Matrix positioning in multiple ways including:
– Issue a press release declaring their positioning/rating
– Customized PEAK Matrix profile for circulation (with clients, prospects, etc.)
– Quotes from the Everest Group’s analysts could be disseminated to the media
– Leverage the PEAK Matrix branding across communications (e-mail signatures, marketing brochures, credential
packs, client presentations, etc.)
The provider must obtain the requisite licensing and distribution rights for the above activities through an
agreement with the designated PoC at Everest Group
FAQs (page 2 of 2)
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