USD 6.3 billion
Middle Office Outsourcing Market Size, Share, Growth Analysis, By Offering (Portfolio Management, Liquidity Management), By Deployment Model (Cloud, On-Premises), By End-User (Asset Management Companies, Stock Exchanges), By Region - Industry Forecast 2024-2031
Report ID:
SQMIG60D2001 |
Region:
Global |
Published Date: November, 2024
Pages:
176
|Tables:
93
|Figures:
73
Middle Office Outsourcing Market Insights
Global Middle Office Outsourcing Market size was valued at USD 6.3 billion in 2022 and is poised to grow from USD 6.97 billion in 2023 to USD 15.60 billion by 2031, growing at a CAGR of 10.6% during the forecast period (2024-2031).
The global middle office outsourcing market has been growing at a significant rate in recent years, largely driven by the increasing demand of continuous support and implementation of new technologies. Middle office entails the non-client facing functions such as risk management and compliance activities. Outsourcing the middle office, hence helps the companies to focus on their core expertise, thereby reducing costs, and improving overall efficiency of functioning. The advancements in technology have been a driving factor for the middle office outsourcing market. The rise in automation, artificial intelligence and machine learning has made it possible for service providers to offer more sophisticated solutions with greater speed and accuracy. This gives greater confidence to the various institutions who are looking for outsourcing, knowing that their operations will be handled effectively. Outsourcing also helps the service providers to offer more customized solutions to their clients, by teams who are more equipped to do so. All of these reasons have made middle office outsourcing more attractive for companies, and hence is driving this market greatly.
Market snapshot - 2024-2031
Global Market Size
Largest Segment
Portfolio Management
Fastest Growth
Investment Operations
Growth Rate
10.6% CAGR
Global Middle Office Outsourcing market ($ Bn)
Country Share for North America Region (%)
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Middle Office Outsourcing Market Segmental Analysis
Global Middle Office Outsourcing Market is segmented by offering, deployment model, end user and region. Based on offering, the market is segmented into foreign exchange and trade management, portfolio management (pre-trade compliance, order management, investment operations, reconciliation, investment record-keeping), liquidity management, asset class servicing, collateral management services (data management, data capture, onboarding, valuation and calculation, daily call administration, collateral servicing, emir reporting) and others. Based on deployment model, the market is segmented into foreign exchange and trade management, portfolio management (pre-trade compliance, order management, investment operations, reconciliation, investment record-keeping), liquidity management, asset class servicing, collateral management services (data management, data capture, onboarding, valuation and calculation, daily call administration, collateral servicing, emir reporting) and others. Based on end user, the market is segmented into investment banking and management firms, asset management companies, stock exchanges, broker-dealers, banks and others. Based on region, the market is segmented into North America, Europe, Asia Pacific, Latin America and Middle East & and Africa.
Analysis By Offering
The portfolio management segment holds the largest share in the middle office outsourcing market. This can be attributed to the growing demand for sophisticated analytics, risk management tools, and portfolio optimization techniques by financial institutions. Increasing competition and fee pressures are prompting asset managers to focus on core investment activities while outsourcing non-core functions like portfolio administration and reporting.
The fastest growing segment in this market is the investment operations. Investment operations outsourcing encompasses a wide range of functions, including trade support, settlement, reconciliation, and processing corporate actions. Outsourcing investment operations can help firms improve operational efficiency, reduce costs, and mitigate operational risks.
Analysis By Deployment Model
The cloud segment of middle office outsourcing deployment model is the dominant as well as the fastest growing segment. Cloud-based deployment involves hosting middle office outsourcing solutions on third-party cloud infrastructure, such as Amazon Web Services (AWS), Microsoft Azure, or Google Cloud Platform (GCP). This provides multiple advantages in terms of scalability, flexibility, cost-effectiveness, and accessibility. As financial institutions seek to modernize their operations, enhance agility, and drive digital transformation, cloud-based solutions are becoming increasingly essential for meeting the evolving needs of the industry.
Analysis By End Use
By the end use, the market is dominated by the investment banking & management segment, and it is also the most rapidly growing segment. Most of the outsourcing occurs in investment banking and management. It includes entities such as borrowers, Peer-To-Peer (P2P) lending platforms, and investors in the market. The responsibilities of middle office outsourcing services in investment banking and management include structuring fees and offering low investment costs to investors. Companies in the global middle office outsourcing market are continuously working on offering enhanced services to buyers, which include all types of investor managers, including entrepreneurial management companies, average-size and large management companies, and institutions managing their own portfolios. Therefore, due to all these factors, the investment banking and management segment is witnessing significant growth.
Global Middle Office Outsourcing market By Offering
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Middle Office Outsourcing Market Regional Insights
North America dominates the middle office outsourcing market. The growth of this market in North America can be attributed to the booming financial industry and increasing use of advanced technologies in such institutions. With the huge amount of data being produced across the world, data management has become one of the key challenges for financial institutions in developed regions such as North America. AI and ML are expected to play a crucial role in analysing these data sets for actionable insights, especially in risk management. The need for cost effective solutions improved operational efficiencies also contribute to the dominance of this region.
Asia Pacific is the most rapidly growing market and holds the second largest position for middle office outsourcing market. This growth is driven by the rise in the use of emerging technologies, such as artificial intelligence, machine learning, etc. as well as the emphasis on lowering transaction costs.
Global Middle Office Outsourcing Market By Region
- Largest
- Fastest
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Middle Office Outsourcing Market Dynamics
Drivers
Technological Advancements
- The growth in technology has played a significant role in the demand for middle office outsourcing. The adoption of advanced technologies such as artificial intelligence (AI), robotic process automation (RPA), blockchain, and cloud computing is reshaping the middle office outsourcing landscape. These technologies improve operational efficiency, enhance risk management capabilities, and enable real-time processing and reporting, driving demand for outsourcing services that leverage them.
Industrial Collaborations & Cost Efficiency
- Collaborations among outsourcing providers and strategic partnerships with technology firms, data providers, and regulatory experts enable providers to expand their service offerings, geographic reach, and technological capabilities to meet evolving client needs. This in turn reduces operational costs and increases efficiency by outsourcing middle office functions. Outsourcing allows them to leverage economies of scale, access specialized expertise, and avoid the expenses associated with in-house operations, such as infrastructure and staffing.
Focus of Core Competencies
- Financial institutions require specialized expertise in areas such as derivatives processing, trade support, performance measurement, and regulatory reporting. Outsourcing non-core middle office functions enables these institutions to concentrate on their core competencies, such as investment management, client relations, and business development. By delegating routine tasks to outsourcing providers, firms can allocate resources more effectively and focus on value-added activities. Outsourcing providers offer domain-specific knowledge, best practices, and industry insights, enabling clients to access high-quality services and stay competitive
Restraints
Dependency on Outsourcing Providers
- Too much reliance on outsourcing providers for critical middle office functions can create dependency risks for financial institutions. Any disruptions, service failures, or conflicts of interest on the part of outsourcing providers could adversely affect business operations, client relationships, and regulatory compliance. Some of the reasons that can lead to delays are disruptions in business as usual (BAU), downsizing of staff, inaccurate defining of the scope of business requirements, and the lack of consolidation of systems.
Privacy Concerns & Compliance Risks
- Middle office outsourcing often involves sharing sensitive financial data with third-party service providers. This raises obvious concerns about data security breaches, privacy violations, and regulatory compliance risks. Financial institutions are subject to stringent regulatory requirements governing outsourcing arrangements, including data protection laws, privacy regulations, and industry-specific regulations. Non-compliance results in penalties, reputational damage, and legal liabilities, posing a significant risk for both clients and outsourcing providers.
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Middle Office Outsourcing Market Competitive Landscape
The landscape of the middle office outsourcing market is characterized by a diverse mix of service providers offering a wide range of solutions to financial institutions worldwide. These service providers compete based on factors such as service quality, domain expertise, technological capabilities, geographic coverage, and pricing strategies. The market includes large multinational firms with global footprint, along with specialized outsourcing providers who focus on niche areas within the middle office. The market also comprises of multiple boutiques outsourcing firms and regional players as well as technology firms and platform providers. The competitive landscape of the global middle office outsourcing market is dynamic and evolving, with continuous consolidation, partnerships, and strategic alliances. As the market continues to grow, differentiation, and client-centricity will become increasingly critical for outsourcing providers seeking to gain a competitive edge and ensure long-term success.
Top Player’s Company Profile
- Accenture
- BNP Paribas
- JPMorgan Chase & Co.
- SS&C Technologies, Inc.
- Royal Bank of Canada
- State Street Corporation
- Citigroup Inc.
- The Bank of New York Mellon Corporation
- CACEIS
- Apex Group Ltd.
- Northern Trust Corporation
- Linedata
- Empaxis Data Management, Inc.
- Indus Valley Partners
- Brown Brothers Harriman
- Genpact
- Adepa Services S.A.
- Hedgeguard
- Societe Generale Securities Services
- GBST Holdings Ltd.
Recent Developments
- In December 2023, Commonwealth Financial Network has added another managed account program, called ‘Select Compass,’ which lets the brokers modify asset allocations across around 100 home-office model portfolios, while the firm handles due diligence, monitoring, reporting and rebalancing. By outsourcing investment-related tasks, the advisors can focus more on delivering competitive, consistent results to their clients.
- In June 2023, two of Australia’s biggest banks, National Australia Bank (NAB) and the Commonwealth Bank of Australia (CBA), will increase the size of their Indian operations, expanding their offshore IT centres in India as they bring previously outsourced work in-house.
- In May 2023, BetaNXT, a provider of wealth management infrastructure software with real-time data capabilities and an enhanced advisor experience, announced the introduction of its Operations as a Service (OPaaS) solution. OPaaS is an outsourcing solution designed to streamline middle and back-office operations, allowing firms to reduce costs, realize new revenue streams, reduce complexity, and better manage risk.
Middle Office Outsourcing Key Market Trends
- Focus on Data Analytics: There is a growing emphasis on data analytics and insights-driven decision-making in middle office outsourcing. Providers are leveraging data analytics tools and techniques to derive actionable insights, optimize processes, identify risks, and enhance performance across various middle office functions, such as trade support, risk management, and compliance.
- Partnerships and Ecosystem Collaboration: Middle office outsourcing providers are forming strategic partnerships and collaborations with technology firms, data providers, regulatory experts, and industry associations. This helps them to enhance their service offerings, access new markets, and stay ahead of emerging trends. Collaborative ecosystems enable providers to deliver integrated solutions that address complex client needs comprehensively.
Middle Office Outsourcing Market SkyQuest Analysis
SkyQuest’s ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Services team that Collects, Collates, Correlates, and Analyzes the Data collected by means of Primary Exploratory Research backed by robust Secondary Desk research.
According to our global middle office outsourcing market analysis, several factors, like continuous technological advancements and the need to focus on core competencies, are driving the growth of this market. Based on offering, the dominant market segment is portfolio management, and the investment operations in the fastest growing segment. Based on deployment of middle office outsourcing, cloud-based deployment is used most widely, hence they are the dominant as well as the fastest growing segment. Investment banking & management is the rapidly growing and largest end user segment of middle office outsourcing. North America has the largest market for middle office outsourcing, since this region is witnessing a boom of various financial institutions. Asia Pacific, on the other hand, is a rapidly growing market, due to the rise in the emerging technologies in this region. This market's landscape shows the existence of international and regional market players. These market players are competing based on factors such as service quality, domain expertise, etc. A key challenge faced by this market is the data privacy concerns. Key market players need to continuously evolve to offer more customized and cost-effective solutions to stay relevant in the middle office outsourcing market.
| Report Metric | Details |
|---|---|
| Market size value in 2022 | USD 6.3 billion |
| Market size value in 2031 | USD 15.60 billion |
| Growth Rate | 10.6% |
| Base year | 2023 |
| Forecast period | 2024-2031 |
| Forecast Unit (Value) | USD Billion |
| Segments covered |
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| Regions covered | North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA) |
| Companies covered |
|
| Customization scope | Free report customization with purchase. Customization includes:-
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Table Of Content
Executive Summary
Market overview
- Exhibit: Executive Summary – Chart on Market Overview
- Exhibit: Executive Summary – Data Table on Market Overview
- Exhibit: Executive Summary – Chart on Middle Office Outsourcing Market Characteristics
- Exhibit: Executive Summary – Chart on Market by Geography
- Exhibit: Executive Summary – Chart on Market Segmentation
- Exhibit: Executive Summary – Chart on Incremental Growth
- Exhibit: Executive Summary – Data Table on Incremental Growth
- Exhibit: Executive Summary – Chart on Vendor Market Positioning
Parent Market Analysis
Market overview
Market size
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- SWOT Analysis
KEY MARKET INSIGHTS
- Technology Analysis
- (Exhibit: Data Table: Name of technology and details)
- Pricing Analysis
- (Exhibit: Data Table: Name of technology and pricing details)
- Supply Chain Analysis
- (Exhibit: Detailed Supply Chain Presentation)
- Value Chain Analysis
- (Exhibit: Detailed Value Chain Presentation)
- Ecosystem Of the Market
- Exhibit: Parent Market Ecosystem Market Analysis
- Exhibit: Market Characteristics of Parent Market
- IP Analysis
- (Exhibit: Data Table: Name of product/technology, patents filed, inventor/company name, acquiring firm)
- Trade Analysis
- (Exhibit: Data Table: Import and Export data details)
- Startup Analysis
- (Exhibit: Data Table: Emerging startups details)
- Raw Material Analysis
- (Exhibit: Data Table: Mapping of key raw materials)
- Innovation Matrix
- (Exhibit: Positioning Matrix: Mapping of new and existing technologies)
- Pipeline product Analysis
- (Exhibit: Data Table: Name of companies and pipeline products, regional mapping)
- Macroeconomic Indicators
COVID IMPACT
- Introduction
- Impact On Economy—scenario Assessment
- Exhibit: Data on GDP - Year-over-year growth 2016-2022 (%)
- Revised Market Size
- Exhibit: Data Table on Middle Office Outsourcing Market size and forecast 2021-2027 ($ million)
- Impact Of COVID On Key Segments
- Exhibit: Data Table on Segment Market size and forecast 2021-2027 ($ million)
- COVID Strategies By Company
- Exhibit: Analysis on key strategies adopted by companies
MARKET DYNAMICS & OUTLOOK
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- Regulatory Landscape
- Exhibit: Data Table on regulation from different region
- SWOT Analysis
- Porters Analysis
- Competitive rivalry
- Exhibit: Competitive rivalry Impact of key factors, 2021
- Threat of substitute products
- Exhibit: Threat of Substitute Products Impact of key factors, 2021
- Bargaining power of buyers
- Exhibit: buyers bargaining power Impact of key factors, 2021
- Threat of new entrants
- Exhibit: Threat of new entrants Impact of key factors, 2021
- Bargaining power of suppliers
- Exhibit: Threat of suppliers bargaining power Impact of key factors, 2021
- Competitive rivalry
- Skyquest special insights on future disruptions
- Political Impact
- Economic impact
- Social Impact
- Technical Impact
- Environmental Impact
- Legal Impact
Market Size by Region
- Chart on Market share by geography 2021-2027 (%)
- Data Table on Market share by geography 2021-2027(%)
- North America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- USA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Canada
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Europe
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Germany
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Spain
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- France
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- UK
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Europe
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Asia Pacific
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- China
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- India
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Japan
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Korea
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Asia Pacific
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Latin America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Brazil
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of South America
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Middle East & Africa (MEA)
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- GCC Countries
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Africa
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of MEA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
KEY COMPANY PROFILES
- Competitive Landscape
- Total number of companies covered
- Exhibit: companies covered in the report, 2021
- Top companies market positioning
- Exhibit: company positioning matrix, 2021
- Top companies market Share
- Exhibit: Pie chart analysis on company market share, 2021(%)
- Total number of companies covered
Methodology
For the Middle Office Outsourcing Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Middle Office Outsourcing Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
Analyst Support
Customization Options
With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Middle Office Outsourcing Market:
Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.
Regional Analysis: Further analysis of the Middle Office Outsourcing Market for additional countries.
Competitive Analysis: Detailed analysis and profiling of additional Market players & comparative analysis of competitive products.
Go to Market Strategy: Find the high-growth channels to invest your marketing efforts and increase your customer base.
Innovation Mapping: Identify racial solutions and innovation, connected to deep ecosystems of innovators, start-ups, academics, and strategic partners.
Category Intelligence: Customized intelligence that is relevant to their supply Markets will enable them to make smarter sourcing decisions and improve their category management.
Public Company Transcript Analysis: To improve the investment performance by generating new alpha and making better-informed decisions.
Social Media Listening: To analyze the conversations and trends happening not just around your brand, but around your industry as a whole, and use those insights to make better Marketing decisions.
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