TOWERGROUP DEBUTS EUROPEAN BANKING & PAYMENTS RESEARCH AND ADVISORY SERVICE

Senior European Analyst Team Focuses on Critical Issues in European Financial Services: SEPA, Pan-European Clearing & Settlement, BPO and More

NEEDHAM, MA / LONDON, 5 May, 2005 – Continuing the expansion of its global capabilities, TowerGroup today announced the launch of a European-wide research and advisory service focused on the banking and payments arena. Respected for its trusted insights and the strength of its financial services domain expertise, TowerGroup serves a global customer base from offices in North America, Europe and Asia-Pacific.

The new European Banking & Payments research service will provide thought leadership and actionable insights on the specific challenges facing the European financial services community.
Coverage will include European universal banking and payments, including retail and wholesale banking, securities and investments – with a focus on such issues as building a true pan-European financial market, harnessing the potential transformative power of business process outsourcing, and breaking through the challenges of cross-border acquisition and consolidation.

"The European Banking & Payments practice is rooted in the TowerGroup tradition of deep research, predictive analysis and decades of domain-specific experience," said Simon Levin, TowerGroup’s general manager of EMEA (Europe/Middle East/Africa). "Our expanding team of European senior analysts are currently assisting some of the region’s most prestigious financial services institutions, including both consumer and wholesale banks and securities and investment firms, by providing the strategic and tactical knowledge needed to excel in a rapidly changing and increasingly globalised industry."

The new research practice is led by TowerGroup veteran analyst and research leader Theodore Iacobuzio, who has been appointed vice president of European Banking & Payments.

Insights on Europe’s Most Pressing Issues

To coincide with the launch of its new European Banking & Payments service, TowerGroup is pursuing an aggressive research and advisory agenda aligned with the issues most critical to European financial services executives.

"In creating our programme, we looked at what will help European financial services providers, and those interested in doing business in Europe, best understand the changes taking place in their market. Equally critical is what actions these players should take to build their businesses and compete – considerations which lie at the core of each report," said Levin.

Below are highlights of some of the newly-published or forthcoming reports from the European practice:

• The Top European Financial Services Issues for ‘05 - ‘06: In a forthcoming report, senior analyst Ralph Silva lays out the top six issues facing European financial services institutions in 2005 to 2006. Following a year of recovery for financial services providers, Silva maps the current shift back to traditional banking values of relationship building and customer focus. His report analyses a range of top trends, including the industry’s focus on CRM, outsourcing, operational risk management, cross-border consolidation, and multi-channel delivery strategies.

• Charting the Challenges Facing SEPA: TowerGroup’s Silva and Chris Skinner lay out the challenges facing the realisation of a Single European Payments Area by the deadline of 2010 set by European regulators and banks. In this forthcoming report, TowerGroup notes the improbability of existing Automated Clearing Houses (ACH) being dismantled and replaced by a Pan-European ACH by 2010 – and the implications for all payments industry participants.

• Building a Pan-European Securities Market: Senior analyst Dushyant Shahrawat examines another obstacle to achieving a true pan-European financial market – overcoming a fragmented clearing and settlement infrastructure. In the forthcoming TowerGroup report, Shahrawat lays out the three things required to improve a clearing/settlement process currently 10 times as long as that of the US: reform and regulatory change to amend industry structures and practices; harmonisation of rules and procedures; and a greater adherence to industry and technical standards to ensure system interoperability.

• The Coming Ascendancy of BPO: In this newly published report, senior analyst Virginia Garcia explores why business process outsourcing (BPO) is gaining increasing favor among European financial services participants. The gradual ascendancy of BPO corresponds to these institutions’ internal efforts to make their business models and processes more agile in the face of a changing and unpredictable market. Fueled by this growing interest, TowerGroup estimates that BPO revenues of third-party providers will reach EUR13.1 billion in 2005, with a compound annual growth rate of 18% though 2008.

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