Global Middle Office Outsourcing Market 2015-2019
Global Middle Office Outsourcing Market
The concept of middle office outsourcing gained popularity among the asset managers post the 2008 financial crisis. The primary role of an asset manager is to maximize returns on the investments of their clients. Shifting market dynamics, profit pressures, and the demand for better returns are driving more and more investment managers to consider outsourcing for their investment operations. The phenomenon of outsourcing which was earlier limited to back-office functions has expanded to outsourcing of middle office functions. Asset managers are considering middle office outsourcing while evaluating their business models and core competencies.Now, the middle office services involve different stakeholders, such as brokers, custodians, and other third-parties, and hence, have increased manual intervention. This results in the need to automate the workflow process to some extent, which can be attained through middle office outsourcing. Also, the increase in investments globally has escalated the demand for middle-office service outsourcing for managing the data flow coming from middle office functions. Errors in the data may lead to wrong investment decisions or delay in reporting, thus affecting the reputation of asset managers. Owing to operating compulsions and the need for the asset managers to focus more on their core competency in investment management, outsourcing of middle office services is gaining momentum worldwide. Middle office outsourcing allows asset managers to achieve several operational advantages, such as cost savings and more predictable costing. Technavio analysts forecast the global middle office outsourcing market to grow at a CAGR of 7.50% during 2014-2019.
Covered in this Report
The Technavio report, namely Global Middle Office Outsourcing Market 2015-2019, is based on an in-depth market analysis, with inputs from industry experts. It covers the market landscape and its growth prospects in the coming years. The report also includes a discussion on the key vendors operating in the market.
Technavio Announces the Publication of its Research Report – Global Middle Office Outsourcing Market 2015-2019
Technavio recognizes the following companies as the key players in the Global Middle Office Outsourcing Market: BNYM, Citi Group, JPMC and State Street
Other Prominent Vendors in the market are: Accenture, Genpact, Northern Trust, SEI, SS&C, SunGard and WNS
Commenting on the report, an analyst from Technavio’s team said: “Due to fluctuating market conditions, investment managers are keeping a close eye on the market situation and the need to evaluate performance on a daily basis is increasing. Investment managers who have entered into outsourcing arrangements are keen on re-evaluating the performance of middle office outsourcing functions. This is helping firms to provide insights to the outsourcing operations team, which helps them in addressing key priorities such as making efficiency improvements in line with future needs, rationalizing arrangements that may have fragmented with time, achieving an ongoing reduction of risks, and enhancing the ability to comply with increasing regulatory requirements. The demand for real-time monitoring of outsourced middle office functions among buyers has therefore seen a marked increase.”
According to the report, middle office services involve different stakeholders such as brokers, custodians, and other third parties, so there is a lot of manual intervention. Clients outsource their middle office functions to automate the work flow process to an extent. Also, in order to diversify the asset risks, hedge funds and private equity firms are investing less in liquid assets than before because of difficulties in valuations. As a result, the demand for middle office service outsourcing has increased as front office activities continue to depend heavily on the data coming from middle office functions.Further, the report states that Technavio believes that the momentum of outsourcing middle office functions is definitely going to increase in the short run but some of the growth inhibitors such as security concerns will affect the rate of adoption in the long run.
BNYM, Citi Group, JPMC, State Street, Accenture, Genpact, Northern Trust, SEI, SS&C, SunGard, WNS