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India: Key hub for financial BPO services
Global business process outsourcing in the financial services sector has the potential to reach a market size of $250 billion, with India playing a key role, says a study by global consulting and research firm Everest Group.
The financial services BPO (FS BPO) sector, is a $16-18 billion market comprising nearly 40 per cent of the $ 40 billion global sourcing market. India, Philippines and China are mature locations for FS BPO, while Eastern Europe, Central America and South America are witnessing the fastest growth, the report, titled, "Role of global sourcing in financial services BPO", said.
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India: Key hub for financial BPO services
"India continues to play a key role in the FS BPO space and offer attractive arbitrage opportunities compared to onshore locations in US, UK, and Europe," Everest Group Partner Vikash Jain said.
Besides labour arbitrage, the attractiveness of India in this space lies in factors such as availability of high-end financial services skilled individuals, risk diversification need by buyers, process excellence and improved service levels.
"Despite challenges, such as constraints in the United States associated with the Troubled Asset Relief Programme (TARP) and data protection measures in the European Union, the impact on global sourcing has been minimal," said Rajesh Ranjan, research director and co-author of the report.
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India: Key hub for financial BPO services
The report further noted that banking BPOs account for nearly 50 per cent of the overall scale of global sourcing operations within FS BPO, while capital markets is the fastest growing segment, with a year-over-year growth of 40 per cent in 2009-2010.
The study analysed the global sourcing phenomena across banking, capital markets, and insurance segments and also analysed labour savings and other factors offered by different nearshore and offshore delivery locations.
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