Everest Group experts, Jimit Arora and Ankur Garg, will outline how large financial services customers can push the envelope in offshore R&A and help you understand how to emulate the best-in-class financial institutions, along with customers in other industries learning from financial services best practices.

1. Today’s Webinar is brought to you by Everest Group
Today’s Webinar Upcoming Webinar
Unlocking Additional Value From Your Key Q2-2010 Global Sourcing Market
Offshored Research & Analytics Developments: Everest Research Institute
Market Vista Report Briefing
Synopsis:
Everest experts, Jimit Arora and Ankur Garg, Tuesday, August 17, 2010
will outline how large financial services 9:00 AM CDT/10:00 AM EDT
customers can push the envelope in offshore
R&A and help you understand how to Speakers:
emulate the best-in-class financial Eric Simonson – Managing Partner -
institutions, along with customers in other Research, Everest Group
industries learning from financial services Anand Ramesh – Research Director,
best practices. Everest Group
About Everest Group
Everest Group is a leading consulting and research firm that comprehensively serves
the Global Services landscape encompassing offshoring, outsourcing and shared
services. An industry leader since creating the sourcing consultancy practice in 1991,
Everest has earned a worldwide reputation for on-going innovation by helping clients
capture optimum value through sourcing strategies and implementation. Committed
to thought leadership, Everest is noted for its fact-based analyses and insights that
are crucial to making the right decisions in today’s environment.
For more information, contact Mark Williamson at mark.williamson@everestgrp.com.
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2. Q&A
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3. Introductions
Jimit Arora Ankur Garg
Research Director Senior Research Analyst
Everest Group Everest Group
Jimit.arora@everestgrp.com Ankur.garg@everestgrp.com
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4. Unlocking Additional Value From
Offshored Research & Analytics
July 20, 2010

5. Agenda
Overview of offshore Research and Analytics
Value proposition of offshore R&A in Financial Services
Evolution of demand and service maturity
Supplier landscape
Summary and implications
Q&A
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6. “Knowledge services” includes a varied set of complex
and judgment-intensive services
NOT EXHAUSTIVE
Spectrum of knowledge services
Knowledge Services
Financial Business Market
research research research Data analytics Legal and IP Other
Equity Company Survey design Marketing Patent Regulation &
research profiling and Administration analytics research compliance
Credit benchmarking Data Risk analytics Legal support
research Industry compilation Fund sales services Editorial
Fixed-income studies and Insight analytics support
research tracking generation Claims Library & KM
Corporate Market entry analytics services
finance studies
Index
research
Quantitative
research
‘Research and Analytics’ (R&A)
Largest segment of knowledge services
Source: Everest Research Institute
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7. The decade old knowledge services industry is at an
inflexion point and preparing for the next generation of
growth and maturity
Global sourcing industry maturity curve
IT applications services
Market value creation
Contact center
Finance & Accounting
Human Resources
Remote infrastructure services
Knowledge services
Pioneers Emerging rapid growth Reaching maturity
Financial services is the largest contributor to offshore knowledge services market
Post the economic crisis, financial institutions seek to further push the envelope in offshore R&A, and will
play a lead role in the growth and evolution of the industry
Source: Everest Research Institute
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8. The existing US$1.0-1.2 billion offshore R&A industry
represents less than 10 percent of the addressable
market potential
Offshore R&A market size Offshore R&A industry distribution
US$ million Percentage
100% = US$1.0-1.2 billion
1,000-1,200
600-700 Others
35-45%
40-45% Financial
Services
15-20%
Pharma & Life sciences
2006 2009
Financial and business research are the dominant service offerings for financial institutions
While capital markets players lead adoption for financial and business research, retail banks and insurance
firms drive majority of the data analytics demand
North America and U.K. contribute more than 75% to the total market activity; recent years have witnessed
activity from other geographies such as Switzerland, Benelux, and Nordics in Europe, and Japan, Hong
Kong, and Singapore in Asia
Source: Everest Research Institute
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9. Agenda
Overview of offshore Research and Analytics
Value proposition of offshore R&A in Financial Services
Evolution of demand and service maturity
Supplier landscape
Summary and implications
Q&A
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10. Labor arbitrage driven direct cost-savings remains the
primary driver in the adoption and growth of offshore
R&A
Billing rates for research and analytics Offshore
US$ per hour Onshore
100-200 Offshore locations such as India
provide financial institutions with
access to large pools of qualified
talent with advanced degrees in
management, finance, or
engineering at significantly lower
costs
50-70 In outsourced delivery, onshore
billing rates are typically 2-4x the
25-40 offshore billing rates
15-25
Market research and data Financial/business research
management and data analytics
Sources: Supplier inputs; Everest Research Institute
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11. However, other offshoring drivers have gained notable
importance from buyers
Outsourcing R&A enables financial institutions to mitigate challenges of
Flexibility of scale managing variations in capacity as volumes fluctuate. The flexibility allows
financial institutions to scale up or down per demand fluctuations depending
on the economic activity (e.g., year-end peak loads)
Access to a ready pool of trained resources in offshore locations allows
Reduced time to financial institutions to reduce time to market and quickly expand coverage
market to newer areas and geographies
Offshoring allows financial institutions to deploy similar amount of capital to
Greater hire a greater number of resources to increase throughput
throughput Further, exploiting time-zones advantage through global delivery, financial
institutions are able to get the analysis of previous day’s market activity
before the start of the next trading day
Sources: Supplier inputs; Everest Research Institute
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12. Agenda
Overview of offshore Research and Analytics
Value proposition of offshore R&A in Financial Services
Evolution of demand and service maturity
Supplier landscape
Summary and implications
Q&A
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13. We analyze the evolution and maturity of the industry
along three key aspects
FS R&A
maturity
and
evolution
Locations maturity
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14. The increased confidence in offshore R&A is resulting
in a more sophisticated demand profile
Locations maturity
Experienced buyers of offshore R&A services are recognizing the growing
Sourcing models maturity of third-party suppliers and increasingly leveraging them for core and
complex work traditionally reserved for captives
Encouraged by the successful experience of larger financial institutions, mid-
Adoption tier players are also increasingly embracing the offshoring in R&A
Contracting approaches are evolving from project-based engagements to
Contracting
large, multi-year engagements
behavior
Buyers are expanding offshoring adoption to newer and complex areas, e.g.,
Scope regulatory and compliance support, advanced modelling
As global sourcing maturity of buyers increases, portfolio issues such as
Risk mitigation location concentration risk are also impacting offshore R&A, and mature
adopters are seeking delivery locations outside India
Sources: Buyer discussions; supplier inputs; Everest Research Institute
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15. Financial research is the most mature area for offshore
R&A delivery
Locations maturity
Functional areas maturity for FS knowledge services Mature Credible Emerging
Financial research Business research Market research Data analytics
Company profiling &
Equity research Survey design Marketing analytics
benchmarking
Industry studies and
Credit research Administration Risk analytics
tracking
Fixed-income research Market entry studies Data compilation Fund sales analytics
Corporate finance Insight generation Claims analytics
Index research
Quantitative research
Emerging segments with high growth potential:
Wealth management including fund lists and recommendations, fund manager screening and performance tracking,
research and analytics activities for portfolio managers and large wealth management firms
Trading and sales support including high-volume middle-office support activities such as contract reviews, trade
reviews, tear-sheet preparation and other corporate functions
Buy-side research for hedge funds and mutual funds (currently sell-side research dominates)
Sources: Supplier inputs; Everest Research Institute
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16. While India remains the most mature delivery location
for offshore R&A, a number of other countries have
emerged
Locations maturity
Locations maturity for FS knowledge services
Mature Credible Emerging
Poland
Romania
China
India Philippines
Costa Rica
Sri Lanka
Chile
South Africa
Argentina
Source: Everest Research Institute
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17. Case Study | Amba Research
Client overview
A global asset manager with more than US$200 billion of assets under management
Over 250 investment professional across seven countries
Offshoring objectives Engagement overview
Structure cost-effective Starting with a short pilot with Amba, the client expanded the scope of work across multiple
solutions to reduce time to areas including equity, fixed income, quantitative research, and sales and marketing
market for new services and Equity Fixed income Quant Sales and marketing
products and improve
profitability Thematic, industry SEC 2A-7 filings Portfolio simulation RFP/RFI support
The client required a research reports and optimization
structured, cost-effective Idea filtering Municipal bond Performance analysis Database
solution that would checklists maintenance
supplement its internal team Data collection and Performance
with skilled offshore presentation attribution
resources Coverage support Back-testing
Events and news Statistical support
monitoring
The client now uses Amba for 80 percent of its research support including background
research, regulatory back-up, etc. It retains in house the remaining 20 percent that is
considered more strategic
Rationale for selecting Amba
Financial services expertise Key benefits and results
Synergies from having Increased focus and time spent by portfolio manager/analyst on networking, idea generation,
equity, fixed income and and stock picking
quantitative research Increased client coverage by ideating on new themes and providing research on themes
support from one supplier where sell-side coverage was limited
Improved depth of evaluation
Accelerated pace of converting broad themes into actionable ideas
Enabled compliance with the regulatory requirements
Helped service new products
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18. Case Study | Irevna
Client overview
One of the top-10 banks in the world, with over US$500 million of assets under management
Offshoring objectives Engagement overview
Research support for senior Scope spans multiple research verticals – equity, fixed income, derivatives, quantitative
analysts and front office research, and commodities
traders Key services provided by Irevna include:
Flexibility of large people- Building valuation models
intensive projects Writing research reports
Expand coverage into new Performing periodic and event-driven updates
and emerging areas Initiating coverage
Writing thematic reports
Generating research and trade ideas
Participating in investor and management calls
Multi-lingual delivery – English, Japanese, German, Spanish, and Mandarin – from three
global locations – India, Poland, and Argentina
The relationship has evolved into an intellectual partnership with Irevna supporting strategic
initiatives, generating trade ideas, expanding coverage, and designing new products
Rationale for selecting Irevna
Quality of talent Key benefits and results
Demonstrated domain Revenue enhancement though new trading and product ideas and tools to monetize research
expertise Expansion of coverage
Output quality Improvement in analyst rankings and increased broker votes
Transparent engagement Flexibility of scale allowing to manage and implement large organization-wide initiatives
model Significantly reduced time to market
Improvement of client’s systems and evaluation of new methods of delivering research work
through “thought-partnership” with Irevna
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19. Agenda
Overview of offshore Research and Analytics
Value proposition of offshore R&A in Financial Services
Evolution of demand and service maturity
Supplier landscape
Summary and implications
Q&A
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20. The supplier landscape has evolved significantly to
include suppliers from multiple categories
NOT EXHAUSTIVE
Supplier landscape
Diversified IT/BPO Specialist R&A
Specialist research and analytics suppliers pioneered the market in early 2000s
IT and BPO suppliers also expanded their play in this space and have scaled significantly.
Acquisitions have been a key component of the growth strategy of these large IT and BPO suppliers
In some cases, the financial services practices of the specialist R&A players are meaningfully larger
than those of the diversified IT and BPO players, justifying their positioning as R&A leaders for the
FS sector
Source: Everest Research Institute
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21. Supplier profile | Amba Research (page 1 of 2)
Company overview Number of FS R&A FTEs
`
Established: 2003 440
Delivery locations: 360
340
Bangalore, India
Colombo, Sri Lanka
San Jose, Costa Rica
Client profile:
Over 70 clients
6 of the top 15 investment banks
6 of the top 15 asset managers
2007 2008 2009
Industry segments for FS R&A Functional areas for FS R&A
Percentage Percentage
Data/index providers Insurance (2%) Business research
3% Sales and
Investment 7%
marketing support 8%
banking 20% Asset
40% management Analytics 11%
74%
35%
Brokerage Financial research
Sources: Company inputs; Everest Research Institute
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22. Supplier profile | Amba Research (page 2 of 2)
Key growth themes and investment areas
Amba is witnessing an uptick in demand for emerging markets research coverage,
Emerging primarily driven by the outperformance of emerging markets compared to U.S. and
markets European capital markets and the reduced headcount in research firms post the
downturn
Amba expects further push to come from domestic demand expansion and rising
consumer spending in emerging markets
High yield and Since the credit crisis Amba has seen a high demand for high-yield and distressed
distressed debt debt analysis
analysis Also, with the recent rise in the issuance of high-yield bonds, there is greater demand
for monitoring these freshly issued securities, not only in the U.S. and Europe but also
in emerging markets where corporate disclosures, corporate governance, and
bankruptcy laws are not as sophisticated
Talent transformation and maintaining differentiation with the best capital markets
Talent talent is a key focus area at Amba
Over the last several years, Amba invested in building a top-notch training team, which
now has over 55 man-years of experience and comprises several CFA charter-holders
The firm recently created a proprietary Skill Competency Framework that identifies
real technical and behavioral skills of the employees, accordingly assigns them to
roles suited to their skills, and also plans career moves and rotations around their
capabilities
Sources: Company inputs; Everest Research Institute
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23. Supplier profile | Evalueserve (page 1 of 2)
Company overview Number of FS R&A FTEs
`
Established: 2000
Delivery locations: 820
760
Gurgaon, India
Shanghai, China 579
Valparaiso, Chile
Cluj, Romania
Client profile:
7 of the top 12 investment banks
5 of the top 10 UK and U.S. retail banks
2 of the top 10 asset managers 2007 2008 2009
2 of the top 10 insurance firms
Industry segments for FS R&A Functional areas for FS R&A
Percentage Percentage Regulation/
Insurance (2%) compliance support
Asset management (2%) Market research (3%) (1%)
Brokerage (2%)
Credit cards Editorial, library, KM services
Data/index providers 6%4% 6%
Analytics
12%
Retail banking 9%
Investment
13% 62% Business research 17% 61%
Financial
banking
FS consultants research
Sources: Company inputs; Everest Research Institute
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24. Supplier profile | Evalueserve (page 2 of 2)
Key growth themes and investment areas
This largely untapped area involves providing R&A services to firms with a large
Wealth network of brokers or financial advisors
management The key support activities are manager research, portfolio construction and
monitoring, operational support, and compliance support
Another upcoming area is analytics, which involves activities such as data retrieval,
data analysis, internal reporting, campaign management, and predictive modeling
Clients are various research teams (equity, derivatives, fixed income, commodities,
Quantitative etc.) and sales and trading functions within investment banks. The activities include:
support Sales support including tear sheets, pitch books, market commentary
Structuring including back-testing of new trading strategies, creation and
maintenance of databases of historical prices, implied volatilities, correlations
Trading support including preparing daily economic statistics, market sentiment,
tracking weekly/monthly performance of bespoke client portfolios and middle-office
support
This involves use of advanced statistical tools like SAS and SPSS to analyze a large
Advanced amount of internal customer data to gain insights into customer behavior and internal
analytics operational data to enable better decision making. Key client segments are marketing
and business managers
Another area of significant interest is risk analytics relating to BASEL II and Solvency II
(actuarial support)
Sources: Company inputs; Everest Research Institute
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25. Supplier profile | Irvena (page 1 of 2)
Company overview Number of FS R&A FTEs (estimated)
`
Established: 2001
Delivery locations: 1,300
1,200
Chennai & Mumbai, India 1,000
Buenos Aires, Argentina
Wroclaw, Poland
Client profile:
Multiple Fortune 500 financial services companies
2007 2008 2009
Industry segments for FS R&A Functional areas for FS R&A
Percentage Percentage
Others
16%
Others 29%
Analytics 10%
55% Investment
banking
Asset 16% 74%
Financial research
management
Sources: Company inputs; Everest Research Institute
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26. Supplier profile | Irevna (page 2 of 2)
Key growth themes and investment areas
Expansion of Given the growth potential in the offshore R&A market, Irevna is focusing on making
coverage and inroads into this untapped market, both within and outside the financial services sector
offerings The firm plans to continue focusing on enhancing the range of its services as well as
its delivery model. It considers leveraging technology as central to this initiative
Expansion of Expanding the footprint across geographies will continue to be an area of focus for
geographic Irevna. This is intended to enable Irevna to diversify its talent base and have access to
footprint a much wider range of skill sets. Irevna plans to simultaneously continue to expand its
business development presence to get closer to its clients
Irevna expects that these initiatives will enable it to enhance its client value proposition
in terms of local relationship managers, nearshore support, access to unique skill sets,
multiple language support, real-time support, and business continuity
Sources: Company inputs; Everest Research Institute
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27. Agenda
Overview of offshore Research and Analytics
Value proposition of offshore R&A in Financial Services
Evolution of demand and service maturity
Supplier landscape
Summary and implications
Q&A
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28. Key implications for buyers
Larger financial institutions that are already offshoring knowledge services can benefit by
Potential to unlock doing more – either through expanded volumes within existing scope (e.g., more
value by doing more coverage, newer markets) or by adding newer and more complex process areas
Newer adopters, especially the mid-sized financial services players, can draw confidence
First-time adopters from the experiences of their larger counterparts and begin with relatively larger
can start big engagements, especially in the more mature process areas
Unlike a few years ago where financial institutions favored their internal captives for
Improved supplier judgment-intensive knowledge services, the growth in scale, delivery capability, and
credibility experience of the suppliers creates a credible set of options for FS firms
First-time adopters of offshore R&A delivery can more quickly establish offshore
operations through the use of these specialist third-party players
Need to differentiate Knowledge services are different from transactional BPO services and they need to be
between R&A and sourced and managed differently. The people model, the operating model, and the value
BPO creation themes tend to be different across BPO and R&A:
Nuances related to the quality and background of the labor force, compensation levels,
approaches to people development, career management, and retention need to be
understood and managed differently in R&A
The operating models require a high degree of client-specific customization and
interaction, and differ from the industrialized and SLA-driven BPO service delivery
Finally, value created through offshored R&A extends beyond direct cost savings and
needs to be adequately weighed by business impact
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29. Agenda
Overview of offshore Research and Analytics
Value proposition of offshore R&A in Financial Services
Evolution of demand and service maturity
Supplier landscape
Summary and implications
Q&A
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Proprietary & Confidential. © 2010, Everest Global, Inc.

30. Q&A
Attendees will receive an email enabling them to download today’s webinar presentation. To
access a recorded audio version of this webinar, please contact Mark Williamson,
mark.williamson@everestgrp.com
For advice or research on research and analytics in financial services, please contact :
Jimit Arora, jimit.arora@everestgrp.com
Ankur Garg, ankur.garg@everestgrp.com
For background information on Everest, please visit:
www.everestgrp.com
www.everstresearchinstitute.com
Thank you for attending today
To ask a question during the Q&A session
Click the question mark (Q&A) button located on the floating tool bar in the bottom right
of your screen. This will open the Q&A Panel
Be sure to keep the default set to “send to a Panelist”
Then, type your question in the rectangular field at the bottom of the Q&A box and click
the send button to submit
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