Middle Office Outsourcing Market to 2027 - Global Analysis and Forecast by Offering (Portfolio Management, Trade Management, Others); End-Use (Investment Banking and Management, Broker- Dealers, Stock Exchanges, Others)

The middle office outsourcing market was valued at US$ 5,084.1 Mn in 2018; it is estimated to grow at a CAGR of 7.8% to reach US$ 9,894.7 Mn by 2027.

The growing need to improve the overall business efficiency is one of the major factors driving the middle office outsourcing market. To meet the efficiency requirements of an organization, the vendors are currently coming up with innovative services and product offerings. They are also focusing on building strategic planning aligned directly with the operations and functions of the organization. Middle office outsourcing services help in aligning business objectives with management planning, and thus maintains coordination between different activities of the organization. For instance, the costs associated with the traditional banking system can be reduced by outsourcing middle office processes, such as procurement and trade-related operations. Furthermore, to enhance the market share and maintain a competitive edge, players in the market are coming up with new ideas and introducing many new technologies and techniques into the middle office services. Furthermore, predictive asset maintenance introduced is likely to help companies in the reduction of maintenance cost, saving money on scheduled repairs, and eliminating breakdowns if any.

Market Insights

Rise of Automation and Cloud Solutions

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.

Offering Market Insights

Portfolio management refers to tracking the performance of individual securities in a stock portfolio, and examining the portfolio to ensure that it meets the investor's growth expectations. The portfolio and trading management help High-net-worth (HNW) individuals in handling their financial assets effectively and securely. It also provides real-time data and analytics in making better investment decisions and also helps in enhancing management performance, and optimizing the operational agility. With the increasing competition in the investment management world, various investors are focusing on the associated fixed costs. Investors are also building different business strategies to make  informed decisions relating to outsourcing of non-core aspects of their business, such as Back-Office operations or Middle-Office functions.

End Use Market Insight

Middle office services involve various stakeholders, namely brokers, custodians, and other third-parties. For automating the workflow process and reducing the overall costs/expenses, clients outsource their middle office operations, thereby leading to increased need for middle office outsourcing services. Adding to this, it is difficult for private equity and hedge fund firms to diversify the asset risks and meet the regulatory compliances due to high investments and costs involved. Therefore, they prefer outsourcing it to the third party.

The players operating in the enterprise content management market focus on strategies such as mergers, acquisitions, and market initiatives to maintain their positions in the market. A few developments by key players are listed below:

• In December 2019, CACEIS and S3 would benefit from value creation gaining competitive positioning and benefits from enhanced geographical presence, full coverage of the asset servicing value chain as well as expanded offering to support both existing and new clients in their projects and their development.

• In September 2019, Northern Trust launched a range of new client dashboards for Omnium, its middle- and back-office technology platform for alternative fund administration.

Middle Office Outsourcing Market Regional Insights

The regional trends and factors influencing the Middle Office Outsourcing Market throughout the forecast period have been thoroughly explained by the analysts at Insight Partners. This section also discusses Middle Office Outsourcing Market segments and geography across North America, Europe, Asia Pacific, Middle East and Africa, and South and Central America.

Middle Office Outsourcing Market Report Scope

Middle Office Outsourcing Market Players Density: Understanding Its Impact on Business Dynamics

The Middle Office Outsourcing Market market is growing rapidly, driven by increasing end-user demand due to factors such as evolving consumer preferences, technological advancements, and greater awareness of the product's benefits. As demand rises, businesses are expanding their offerings, innovating to meet consumer needs, and capitalizing on emerging trends, which further fuels market growth.

Market players density refers to the distribution of firms or companies operating within a particular market or industry. It indicates how many competitors (market players) are present in a given market space relative to its size or total market value.

Major Companies operating in the Middle Office Outsourcing Market are:

1. Adepa Global Services S.A.
2. Brown Brothers Harriman
3. Caceis
4. Hedgeguard
5. JPMorgan Chase & Co.

Disclaimer: The companies listed above are not ranked in any particular order.

Global Middle Office Outsourcing Market Segments:

Middle Office Outsourcing Market – By Offering

• Portfolio Management
• Trade Management
• Others

Middle Office Outsourcing Market – By Component

• Investment Banking and Management
• Broker- Dealers
• Stock Exchanges
• Others

Middle Office Outsourcing Market – By Geography

• North America

  • U.S.
  • Canada
  • Mexico

• Europe

  • France
  • Germany
  • Italy
  • Spain
  • UK
  • Rest of Europe

• Asia Pacific (APAC)

  • Australia
  • China
  • India
  • Japan
  • Rest of APAC

• Middle East & Africa (MEA)

  • Saudi Arabia
  • UAE
  • South Africa
  • Rest of MEA

• South America (SAM)

  • Brazil
  • Rest of SAM

Companies

• 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
• The Bank of New York Mellon Corporation

The List of Companies - Global Middle Office Outsourcing Market

 

1. Adepa Global Services S.A.
2. Brown Brothers Harriman
3. Caceis
4. Hedgeguard
5. JPMorgan Chase & Co.
6. Northern Trust Corporation
7. Societe Generale Securities Services
8. SS&C Technologies, Inc.
9. State Street Corporation
10. The Bank of New York Mellon Corporation

• Save and reduce time carrying out entry-level research by identifying the growth, size, leading players and segments in the global middle office outsourcing market.

• Highlights key business priorities in order to assist companies to realign their business strategies.

• The key findings and recommendations highlight crucial progressive industry trends in the global middle office outsourcing market, thereby allowing players across the value chain to develop effective long-term strategies.

• Develop/modify business expansion plans by using substantial growth offering developed and emerging markets.

• Scrutinize in-depth global market trends and outlook coupled with the factors driving the market, as well as those hindering it.

• Enhance the decision-making process by understanding the strategies that underpin commercial interest with respect to client products, segmentation, pricing and distribution.