The BFS industry is completely dependant on data and analytics and the services to provide these analytics are critical. These services enable analytics data preparation and management, routine business intelligence reporting and dashboarding, advanced analytics modeling and ongoing decision-making for industry-specific use cases, including customer and marketing analytics, fraud, risk and compliance, and portfolio analytics.
To this end, we're excited to announce the release of our latest Blueprint Report--this one on BFS Analytics Services, authored by HfS Research Director Reetika Joshi's exhaustive research to arrive at this comprehensive view of the market. So let's get an up-close view from Reetika on the Blueprint Report:
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Reetika, why have we undertaken an HfS Blueprint on analytics services specifically in banking and financial services?
The BFS industry is heavily reliant on the use of data, and yet the potential for embedding analytics-driven insights into operations is still far greater than adoption. The last few years have seen their focus on risk analytics intensify as regulatory changes and government scrutiny continue to mount. Along with balancing this growing compliance work, banks have also found a renewed interest in customer analytics to orient their growth initiatives. Most banks are not set up to meet digital consumer needs and are now embarking on digital transformation, powered by customer and marketing analytics.
Major banks and financial institutions are once again focusing on the next generation of analytics models, tools, and skillsets. We see demand from BFS clients across fraud, risk and compliance, AML/KYC, and customer and marketing analytics. Enterprise buyers in this industry are either unable to find the talent they need, for areas like specialized fraud, risk and compliance, or technology platform expertise, or are unable to afford it at the level of scale needed today—leading us to undertake this Blueprint to understand market direction. We see BFS clients trying to balance and complement their internal analytics teams with the global talent access that some service providers can bring them.
Report author Reetika Joshi, HfS Research Director (click for bio).
So how would you describe the current state of BFS analytics services?
For most service providers, big data and analytics services are the fastest-growing businesses in their portfolios, with significant revenues coming from BFS clients. This is due to the growing adoption of data-driven decision making within different parts of the enterprise for BFS buyers, and the need for more analytical support than internal staff can support.
Service providers have doubled down on BFS verticalization in their analytics portfolios, turning initial work with clients for analytics modeling and reporting into portfolios of pre-packaged industry-specific use cases and catalogues. As service buyers consistently stress the need for domain expertise from service providers, we see service providers strengthening industry training programs and hiring professionals from BFS industry backgrounds to increase contextual understanding and allowing for more meaningful analysis. We see the types of BFS analytics solutions changing today, with the next level of analytics use case development. BFS analytics services buyers seek the following:
- The application of cross-vertical learnings to banking, especially from other consumer-facing industries that have progressed in customer experience analytics (e.g., from telecom to retail banking)
- The incorporation of newer sources of data into existing analytical models to gain new insights into fraud, risk, and marketing (e.g., sensors, geolocation mobile data, and web and social data)
- The exploration of modern business intelligence and reporting applications and tools, big data infrastructure, and advanced analytics platforms (e.g., cloud-based data warehousing, the mobile delivery of reports, and insights)
Analytics and Big Data, Business Process Outsourcing (BPO), Buyers' Sourcing Best Practices