A study done by Everest Group reveals that the Banking Financial Services and Insurance (or BFSI) segment worth $100-110 billion, one of the outsourcing industryís major markets, experienced a 25% decline in contract value in 2012 from 2011.
According to the report, the decline in contract value in the BFSI market is covering another major issue which is the challenge of procurement and management of large application deals. While the quantity of BFSI outsourcing contracts almost didnít change, the decline in contract value last year was fairly visible. The BFSI market that experienced the decline last year was EMEA (Europe, Middle-East, and Africa), while North America has been experiencing the decline for the last three years.
It also showed that in 2012, large application deals in the BFSI sector remained flat, but the value of total contracts improved. Moreover, since banking buyers are looking for solutions to reduce costs, the demand for application maintenance services increased.
Also, outsourcing in the loans and credit card segment increased last year, while commercial and retail banking outsourcing activity declined.