Outsourcing Trends in the Chinese Banking Industry

by Hua Zhang, July 12, 2011
Industry Trends
Asia-Pacific

Abstract

Outsourcing in the banking industry in China reached US$33 billion in 2010, with ITO accounting for 75% at an annual growth rate of 12%, and BPO accounting for 24% at an annual growth rate of 20%.

In a new report, Outsourcing Trends in the Chinese Banking Industry, Celent examines the market size, customer segmentation, outsourcing business scope, and players.

The major BPO businesses are credit card, disaster recovery, call center, and data processing. Current major customers are joint stock banks and city banks, and it is because they don’t have a large IT team like state-owned banks. Recently, state-owned banks had outsourcing trials, and there are many successful cases, so they will start their outsourcing in the near future. Another potential field is rural banks, and the number of new rural banks will reach 1,000 in 2011.

While large state-owned banks have mostly outsourced to their own software centers and data centers, or to service providers such as IBM and HP, small to medium-size commercial banks have mainly outsourced to professional technology firms. Small banks are a potential market, and their current outsourcing business is credit card outsourcing.

"In terms of scale, the largest outsourcing service providers are software and data centers of large state-owned banks," says Hua Zhang, analyst with Celent’s Asia Financial Services group and author of the report, "followed by third party outsourcing companies. The former mainly serve their respective banks, while the latter mainly provide outsourcing services to joint-stock banks and city banks. At present, some service providers are venturing into the new rural bank market and setting their sights on large state-owned banks."

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 operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

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Michele Pace
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Europe (London)
Chris Williams
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Table of Contents

Executive Summary

3

Introduction

4

Market Size

6

 

BPO in the Chinese Banking Industry

8

 

EPO in the Chinese Banking Industry

10

Credit Card Outsourcing

12

 

First Data

13

 

China UnionPay Data

14

Disaster Recovery Outsourcing

17

SaaS Services for Rural Banks

20

Outsourcing of Call Centers and Data Processing

23

Customer Segmentation

25

Service Providers

28

 

Software Centers and Data Centers of Large Banks

28

 

Third Party Outsourcing Companies

28

Conclusions

33

Leveraging Celent’s Expertise

35

 

Support for Financial Institutions

35

 

Support for Vendors

35

Related Celent Research

36

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