TowerGroup Predicts Increase in Outsourcing Contracts for Asset Management Industry
A recent TowerGroup report predicts that the frequency and scope of outsourcing contracts will accelerate over the next 18 months and assets under administration will increase by 12 percent per annum through 2007. According to the report, top-tier custodian banks will dominate the business process outsourcing (BPO) market, providing a range of services, including compliance, client statements and equity execution. Non-financial institutions also will make some headway in the BPO market as large systems integrators attempt to extend their BPO and offshore services beyond call centers into trade support functions and exception management. Moreover, both vendors and integrators will offer a viable BPO alternative, mostly targeting mid-tier firms. TowerGroup cites capability, system renewal, specialization, risk, growth, compliance, new products and cost as the key drivers of outsourcing.