Key Findings & Highlights:

W&A BPS is a mature business with high tier one adoption and low mid/small tier adoption. Current adoption is from global banks, with single tower BPS engagements. Vendors are delivering elemental processes focused on compliance and fund administration (asset/liability valuation/performance), from offshore centers.    

The W&A BPS market is led by its oldest market, North America, which accounts for ~40% of client spend. Europe is just as large, with ~40% of client spend. ROW is moving rapidly from an emerging to established market status in W&A BPS.

The W&A BPS market is established in mature markets, especially the U.S., and U.K.  

The primary client profile is:

• Current: tier 1 banks (wealth division) and mutual fund networks remain the primary adopters
• Current: support for single product line (e.g. fund administration, portfolio management, compliance) remains primary service bundle
• Future: mature markets: small/startup wealth managers. Emerging markets: regional bank trust departments, wealth managers
• Future tier 1 banks: support for expanded channel initiatives and conversion to customer-centric management

Clients are buying service bundles including:

• Manual review, remediation, and analysis of assets/liabilities and entities (customers, counterparties)
• Process optimization to improve efficiency, accuracy, and meet deadlines
• Emerging: processes: increasing data/transaction support, compliance support, and support for independent asset managers (direct and via industry service vendors). No areas are declining, as W&A BPS is underpenetrated
• Emerging: process bundles: will remain single process W&A BPS service bundles in tier one, and multi-tower in lower tiers
• Emerging: BPaaS: for all managers to share overhead costs (especially for compliance) and apply best practices.

Vendors have tended to focus on individual country markets for their services, primarily the U.S. However, globally offshore and nearshore delivery still dominates in the W&A BPS market, with >60% of service provider employees based in India. However, onshore delivery locations are an important part of this market.

The leading vendor selection criteria are domain or sector expertise, knowledge of the client’s business, process transformation and change management capability, ITS capabilities, and the ability to achieve a strategic partnership with the client organization (to date demonstrated by existing work with other BPS for the client).