The media, and vendor marketing departments, have described RPA as a compelling technology for enterprises, based on its perceived ability to reduce operational cost. However, our review of case studies and BPS vendor offerings reveals a more complex set of drivers at work. Here I take a brief look at examples of the application of RPA in the banking sector. The banking industry has been ch[...]

  Here I take a look at how platform-based business process services (BPS) is yielding benefits for retail banks – specifically, delivering manual processes with greater efficiency, increasing automation, and delivering transaction products at scale. Delivering manual processes with greater efficiency Retail banking (RB) BPS is a large-scale, mature business with high adop[...]

At its recent Confluence client and stakeholder event, Infosys outlined its overall business strategy, based on the belief that BPO as it is delivered currently will be replaced by business process as a service (BPaaS) delivered on virtual stacks within a few years. Here I take a quick look at the Infosys vision and its application within financial services. Infosys described the transition to [...]

In the retail banking BPS market assessment I am currently undertaking, several key trends are emerging regarding which processes are being outsourced and why. Banks do not outsource all processes at once, and selecting the highest priority processes to outsource can be reduced to an analysis of two key dimensions: Margin: where profit margins are highest, usually with new processes or produ[...]

Financial institutions are seeking to deepen their operational capital in order to drive down cost of operations, increasing fixed cost and reducing variable cost (non-linear cost reduction). Here we look at two examples of how institutions are achieving this by partnering with third party operations vendors. Capital Markets Client with Broadridge In this example, Broadridge is providing a p[...]

Much has been written about FinTech in banking. However, the focus has been on functionality enablement and consumer experience, with little insight into what the limits of FinTech benefits might be (and how that would shape an implementation strategy) or how banks can enable a roadmap that drives process improvement. Here I address both of these questions. What are the reasonable goals of FinT[...]

There has been a recent spate of acquisitions and partnerships among Financial Services BPS vendors which reveals interesting trends. These include the following deals from 2015: HCL and CSC: Two JVs were formed, whereby HCL will operate and expand the existing Core Banking business of CSC. The first JV will focus on account management and delivery governance while the second [...]

In Q2 2015, the U.S. Department of Labor issued a notice of proposed rulemaking, changing the definition of who can be considered a fiduciary to a retirement account or plan. The rule, which is currently in a comment period and should be implemented by Q2 2016, extends fiduciary responsibility to advisors, many of whom are currently under a less strict suitability standard of care. The U.S. govern[...]

Payments processor Worldline has agreed to acquire Equens for cash and stock in a multi-part transaction expected to close in Q2 2016, with both parties claiming this to be a transformational deal. Here we take a look at the details of the deal and assess the impact it will have on the European payments market. Criteria for success in payments processing The payment processing industry is a [...]

The major capital markets custodian firms recently reported Q3 2015 financials. The custodians provide critical operations support to global capital markets, and their performance provides an early warning measure of the state of the capital markets industry in general. Here we look at the performance indicators for BNY Mellon, State Street, and Northern Trust, reflect on the implications for the [...]

NelsonHall has just published a market assessment on Analytics and Reporting (A&R) BPS in banking and capital markets (BFS). This is an emerging BPS market with few significant competitors, and adoption from only a few institutions who are tier 1 banks in mature markets. There are many vendors of point A&R solutions, but no standard or dominant vendor has emerged to manage the process valu[...]

The most important development in U.S. banking BPS in the last five years has just been announced (it may still not pass the U.S. Congress, but this analyst believes that too much pressure will be applied by industry for Congress to block it). The announcement is that the signatories to the Trans-Pacific Partnership (TPP) have reached an agreement on the terms of the trade agreement and will no[...]

I recently attended Genpact’s industry analyst and advisor conference, at which the vendor described its approach to success in a time of rapid change for enterprise operations delivery. It believes that most enterprises are ‘cemented’ in the wrong place due to challenges with legacy processes underpinned by legacy technology, and that enterprises unable to adapt quickly will die[...]

Today’s capital markets industry is severely capital constrained, and this is likely to get worse over the next few years. Internal deployments of new or improved solutions will become harder to resource (both in terms of cash and manpower), and managed services will be the preferred way to improve operations. Furthermore, managed services that offer to improve process and/or vendor manageme[...]

Over the past few weeks the major payment processing vendors have reported first quarter 2015 financial results, and they show a noticeable slowdown n y/y growth from 2014 (refer to NelsonHall Tracking Service articles for detailed analysis of the quarterly results). Summary results for Q1 2015 (in USD unless stated otherwise) are as follows: Card networks: Mastercard: +2.7%&nbs[...]

Capgemini announced today its intention to acquire IGATE. Capgemini is offering $48 per share, or $4.04bn, a premium of ~5% over current IGATE share price. IGATE had debt at end 2014 of $686m and cash on hand of $192m. This offer gives IGATE an enterprise value of ~$4.53bn. Capgemini is thus paying a massive 15.5 x 2014 earnings ($292m) and nearly 3.6 x 2014 revenues. The acquisition [...]

Banks have been struggling to adapt to changing, expensive regulations, and 2015 and 2016 will see further implementation requirements requiring large investments to achieve compliance. Here is a review of some of the more important ones and a look at the implications for bank operations strategy. Key regulations taking effect over the coming months are: EMV (Chip-based payment cards) for[...]

In Capgemini’s recent North America analyst conference, the company provided a compelling description of how its approach in North America has developed recently, together with examples of how this has succeeded, and shared its vision and a roadmap for the next few years. Confidence about prospects for 2015 is high. Capgemini’s 2014 revenues in North America were €2,230m, a gro[...]

Worldline, which IPOd in May 2014, has announced results for full year 2014 and has presented its views on the payments market, its business roadmap, and its successes to date. The results, below, are subject to adjustment when Worldline files its financial reporting statements in late March: Revenues were €1,149m, up 2.8% y/y  Operating margin be[...]

Q4 2014 results from the top five U.S. headquartered securities services firms indicate that revenue growth for securities and custody services is slowing down. The two largest global custodians, BNY Mellon and State Street, along with Citibank, reported revenue decline in calendar year Q4 2014. The figures below show change in securities services revenue versus the prior quarter (q/q[...]