Wealth Management Outsourcing: Vendor Landscape

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16 April 2013
Arin Ray

Abstract

Wealth management firms continue to confront the lasting effects of the financial crisis. Lackluster market conditions, an erosion in assets and client base, stringent regulations, increased client demands, and an increased focus on risk are having adverse effects on firms' revenues and costs. Many firms are choosing to outsource significant parts of their operations in order to focus only on their core business.

In the report, Wealth Management Outsourcing: Vendor Landscape, Celent analyzes the vendor market in wealth management outsourcing. This report follows up on Celent’s earlier study, Wealth Management Outsourcing: A Global Market Perspective, which looked at market trends in wealth management outsourcing. This report focuses on 15 industry vendors, including: Advent Software, Cognizant Technology Solutions (CTS), FIS, Genpact, HCL Technologies, iGATE, Infosys, Miles Software, MphasiS, Polaris Financial Technology Limited, SEI, State Street, SunGard, Tata Consultancy Services (TCS), and WNS.

Most vendors are quite similar in their basic offerings, because all are required to meet basic functionalities, technology requirements, support services, and operating models. However, there are several areas in which vendors can distinguish themselves from their competition. Differentiating factors include: specific focus on selected functionalities, a subsegment of market participants, or BPO vs. ITO providers, operating models (e.g., local installation, web-based offering etc), pricing models, and partnerships with other vendors (i.e., implementation partner for a product vendor) or even having a wealth management product of its own. It is expected that the focus will slowly shift from IT outsourcing to business process outsourcing.

“Most vendors’ offerings are broadly similar. All of them have developed strong expertise in mid to back office functionalities, while support for the front office is relatively less developed,” says Arin Ray, Analyst with Celent’s Securities & Investments Group and author of the report. “This is due to the fact that wealth managers are still reluctant to outsource front office functionalities. However, things are changing, as firms look to outsource more front office functions. As the market evolves and vendors build on their expertise over the next 18 to 24 months, the differences in vendor offerings will become clearer.”

This report provides a brief overview of the wealth management outsourcing market, followed by a discussion of the vendor landscape. It then describes participating vendors and their offerings in this space, and concludes with Celent’s evaluation of how vendors can differentiate themselves in this market.

This 30-page report contains 15 complete vendor profiles and two tables.

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