The Middle office outsourcing market will reach $9.8 Billion by 2027 from $5 Billion in 2018 to grow at 7.8% CAGR during (2019-2027).
PUNE, MAHARASHTRA, INDIA, January 27, 2020 /EINPresswire.com/ — Over the past decade, large players such as State Street, Citigroup, JPMC, and BNYM made significant investments in the outsourcing field of middle office and strengthened their service offerings. The lessons learned in the past have been leveraged, and the outcome is more stable models that give asset managers the confidence to implement the outsourcing of middle offices.
Companies outsourcing middle office activities face several challenges mainly due to decisions such as staff reduction, business requirements, closing offices, and consolidating programs. This resulted in significant delays in the completion of outsourcing activities. Moreover, the capital and time investment by both service providers and asset managers would result in larger asset managers scaling back their goals for outsourcing middle office. Vendors operating in middle office outsourcing collect data from a variety of sources, such as stock exchange feeds, broker-dealers, and regulatory filings as a single provider cannot have information on multiple securities.
The major companies operating in the middle office outsourcing market include Adepa Global Services S.A., Brown Brothers Harriman, Caceis, Hedgeguard, JPMorgan Chase & Co., Northern Trust Corporation, Societe Generale Securities Services, SS&C Technologies, Inc., State Street Corporation, and The Bank of New York Mellon Corporation.
Various analytics services are being adopted by the firms for transforming the unstructured data gathered from various online channels to structured data in order to gain meaningful insights. “Predictive analytics” is one of the major advanced analytics tools used to understand and code the behavior pattern of business and consumers. For increasing revenue at various organizational levels, such as stock exchange, private equity management, investment baking, clearing house companies, and hedge funding companies, analytical tools help numerous end users.
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The optimization of middle office operations, such as reconciliation reporting and billing, portfolio accounting, staff augmentation, plays a crucial role in financial institutions as outsourcing helps in overcoming issues related to workflow disruption and also safeguards from wrong reporting. Thus, the emergence of automation is among the key trends in the global middle office outsourcing market. It eliminates unnecessary processes, reduces operational risks, provides valuable insights, and cuts down cost.
Furthermore, cloud-based solutions, such as the “SaaS middle office model,” are being increasingly adopted for decreasing operational costs. The emergence of cloud solutions and increasing automation are likely to drive the middle office outsourcing market in the coming future. Cloud-based middle office solutions help in enhancing operational flexibility by providing frequent upgrades and enhancements, on-demand scalability, and extensibility as firms launch new and innovative products.
The Asia Pacific countries including India, China, Japan, South Korea, Australia, and Rest of Asia Pacific. In 2018, the Chinese government enabled foreign companies to establish wholly owned entities or else take majority stakes in joint ventures, thus allowing international companies to compete on an equal competing field with domestic incumbents. In an attempt to further accelerate the investment management industry, Chinese regulators have released a range of rules enabling securities firms as well as insurers to unveil mutual funds. Aggressive competition amongst asset managers as well as other institutions including banks, trust companies, and securities firms are expected to create further challenges for asset managers for maintaining high standards of governance and transparency in their chase of market share. The increasing complexities are expected to propel the middle office outsourcing market in China.
Key findings of the study:
The middle office outsourcing market is segmented into offering and end-use; the middle office outsourcing market is also analyzed across five major geographic regions—North America, Europe, APAC, MEA, and SAM. Based on offering, the middle office outsourcing market is further segmented into portfolio management, trade management, and others. Currently, the portfolio management segment dominates the market and is expected to be the fastest-growing segment during the forecast period. Based on end-use, the middle office outsourcing market is segmented into investment banking and management, broker-dealers, stock exchange, and others. In 2018, the investment banking segment dominated the middle office outsourcing market.
The listing of key players is derived by considering multiple factors such as overall revenue, solutions portfolio, new product launches, market initiatives, investment in technology up-gradation, mergers & acquisitions and other joint activities. Over the past decade, large players such as State Street, Citigroup, JPMC, and BNYM made significant investments in the outsourcing field of middle office and strengthened their service offerings. The lessons learned in the past have been leveraged, and the outcome is more stable models that give asset managers the confidence to implement the outsourcing of middle offices.
The industry operates in a competitive marketplace, and the companies are focusing on developing new applications, expanding their current product portfolio, and diversifying client base. Major market players of the middle office outsourcing market are based in the US and developing economies of APAC. However, the market is penetrating at a high growth rate in APAC.
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The players present in middle office outsourcing market mainly concentrate towards the partnership, collaborations, agreements, and other activities for the deployment of new technological solutions across the sector permit the company to maintain its brand name. Few of the important market initiatives and acquisitions from the industry are mentioned below:
• IGM Financial Inc. selected CIBC Mellon to assume most of IGM’s fund services functions. This would add fund administration servicing solutions to the custody and related services that CIBC Mellon already performs for IGM.
• Northern Trust successfully integrated its middle-office technology with a number of trading platforms including Bloomberg AIM.
• State Street Corporation announced that it completed its acquisition of Charles River Systems, Inc. (Charles River Development). The combination would enable the industry’s first-ever global interoperable platform connecting the front, middle, and back-office with one provider.
• The Northern Trust launched a range of new client dashboards for Omnium, its middle- and back-office technology platform for alternative fund administration
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Source: EIN Presswire