Market Trends of Global Application Outsourcing Industry
This section covers the major market trends shaping the Application Outsourcing Market according to our research experts:
BFSI to have a significant share
- The growing base of new-age customers is compelling the banking, Financial Services, and Industrial Industry (BFSI) to redirect their efforts to provide a better customer experience. A minimal switching cost coupled with multiple players in the industry has made it easier for the customers to change their service providers easily. For higher customer retention and better profitability, the BFSI sector must offer its customers an engaging user experience and convenience. Technology-enabled solutions help companies deliver more accurate and personalized services and a superior customer experience.
- Fintechs may utilize big data to build thorough user-profiles and precise client segmentation strategies, allowing them to customize their services to their consumers' demands. Personalized services can be provided using advanced modeling approaches that take into account a person's risk perception, age, gender, financial circumstances, location, and, in some instances, relationship status.
- As per Crisil, the IT Industry will post a strong recovery with revenue growth of 11% in FY 2022. The recovery will be led by increasing outsourcing and accelerating digital transformation services, mainly in banking, financial assistance, insurance, retail, and healthcare. BFSI, which accounts for 28% of IT service revenue, will grow 13-14% in FY 2022.
- Major companies in the market are looking for strategic mergers and acquisitions to expand their global footprints. For instance, in January 2021, Tech Mahindra acquired Payments Technology Services for USD 9 million to expand its footprints in the BFSI sector. Payments Technology Services provides banking and payments solutions to financial services firms in Asia.
- Many players in the market are coming up with various product development and innovations to stronghold their market presence. For instance, in April 2022, IBM announced its IBM z16, a real-time AI for transaction processing at scale and the industry's first quantum-safe system. IBM z16 is specifically designed to help protect against near-future threats that might be used to crack today's encryption technologies.
- In May 2022, TCS announced its BaNCS Cloud product suite would enable financial services firms with cloud-native capabilities to accelerate digitization and drive their growth and transformation.
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Asia-Pacific is expected to show a significant growth
- The increasing demand for BFSI and the move toward digital transformation are expected to drive market growth in the region. The governments in the area are rigorously investing in digital transformation. For instance, the Ministry of Electronics and Information Technology (MeitY) has announced a budget outlay of INR 10,676.18 crore for the Digital India program, INR 6,388 crore in the last year's budget.
- The rising need for healthcare outsourcing results from increased spending on healthcare services, and the expense of government healthcare programs has shifted to healthcare sources. Numerous new multi-strength hospital projects have come up in the region, boosting the requirement for outsourcing.
- Also, Hospitals have begun to utilize third-party services to understand imaging results or records of doctor's case notes which are set to create a booming effect in the healthcare outsourcing market. As per the Ministry of Finance of the People's Republic of China, In 2021, total public expenditure on health care and hygiene in China amounted to about 1.92 trillion yuan.
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