Outsourcing in European Asset Management

Recovery and the Potential for Growth
by Anshuman Jaswal, PhD,  Muralidhar Dasar, March 8, 2011
Industry Trends
EMEA

Abstract

The economic environment means that asset managers, especially the smaller ones, are not in a position to invest in technology. Outsourcing firms have taken a central role, moving from back office and some middle office tasks to front office operations.

In a new report, Outsourcing in European Asset Management: Recovery and the Potential for Growth, Celent looks at the main trends in outsourcing and assesses the impact of the crisis on assets under management. It outlines the factors that encourage outsourcing and its advantages, considers some of the newer functional areas for outsourcing, and studies the types of models.

Overall outsourcing revenues are expected to rise to around €15 billion in 2012, from just below €12 billion in 2008. The middle and back office segment is expected to reach €3.4 billion in 2012, having declined to €3 billion in 2008. Similarly, IT outsourcing is expected to rise to €6.8 billion from a low of €5.2 billion in 2008. Revenues from client servicing and front office outsourcing are also expected to continue their growth through 2012.

"Outsourcing revenues are recovering after the financial crisis," says Anshuam Jaswal, Celent Senior Analyst and coauthor of the report. "The impact of regulations such as the Alternative Investment Fund Managers’ (AIFM) Directive and UCITS IV is going to be considerable and will affect the development of the industry in the near future."

"The nature of outsourcing has also changed," adds Muralidhar Dasar, Analyst and coauthor of the report. "Service providers are becoming more assertive, and the depth of their offerings is increasing."

This report discusses key aspects to keep in mind when selecting a vendor. It also looks at the types of leading outsourcing providers and their strengths and weaknesses. A section on European regulation discusses the impact of the AIFM Directive and UCITS IV on the asset management industry and its related service providers.

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

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Michele Pace
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Table of Contents

Executive Summary

3

Introduction

5

Market Overview

6

 

Market Sizing

6

 

Outsourcing Trends

7

 

Drivers of Outsourcing

10

 

Types of Outsourcing Models

14

Type of Service Providers

16

 

Areas for Outsourcing

16

Conclusion

21

Leveraging Celent’s Expertise

23

 

Support for Financial Institutions

23

 

Support for Vendors

23

Related Celent Research

24

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