Outsourcing: The Coming Wave in Investment Management

March 20, 2002

Abstract

Boston, MA, USA March 20, 2002

 

Celent Communications predicts the demand for outsourcing services by US and European investment managers will generate US$30 billion in outsourcing revenues by 2006.

In a new report, Outsourcing—The Coming Wave in Investment Management, Celent examines the transformation of outsourcing services, reviews the factors driving demand, analyzes the competitors and the various outsourcing business models, and considers the factors which will determine success in the marketplace. The report also presents survey findings of leading investment managers’ interest in, and attitudes about, outsourcing.

One key finding of the report is that 40% of investment managers with greater than US$1 billion in assets are considering outsourcing back, middle, and more limited front-office operations by 2004. However, they will grant business only to stable, well-heeled providers whom they trust.

According to

Pamela Brewster, analyst at Celent, "With the market downturn and intensified competition for assets, investment managers are re-evaluating their core competencies and looking to gain operational efficiencies. Outsourcing promises to deliver three significant benefits: lower overhead costs, increased productivity, and risk reduction."

A Table of Contents is available online.

of Celent Communication's Institutional Securities & Investments and  Wholesale Banking research services can download the report electronically by clicking on the icon to the left.

        

Send mail to info@celent.com with questions or comments about this Web site.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

 

Boston, MA, USA  March 20, 2002

Return to report Abstract

 

EXECUTIVE SUMMARY 3
BACKGROUND 4
  Margin Pressures 6
  Globalization 8
  Technology Challenges 8
  T+1/STP 9
MARKET OPPORTUNITY 11
  Areas Likely to be Outsourced 12
  Form Over Function 14
  Market Potential 16
INVESTMENT MANAGER SURVEY 17
COMPETITIVE LANDSCAPE 22
BUSINESS MODELS 27
TACTICAL IMPLICATIONS 32
  Technology Platform 32
  Organizational Structure 35
  Acquisitions/Partnerships 36
  Implementation 37
  Pricing 38
ADDITIONAL CONSIDERATIONS 40
  Choosing Ideal Clients 40
  Transfer of Risk 40
  Market Education 41
FUTURE TRENDS 42
CONCLUSIONS 44

 

        

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