® Everest Group PEAK Matrix™ for KYC-AML BPO Service Providers Focus on TCS June 2018 ® ™ Copyright © 2018 Everest Global, Inc. This document has been licensed for exclusive use and distribution by TCS EGR-2018-24-E-2696 Introduction and scope Everest Group recently released its report titled “Know Your Customer – Anti Money Laundering (KYC-AML) BPO – State of the Market with Services PEAK Matrix™ Assessment 2018.” This report analyzes the changing dynamics of the KYC-AML BPO landscape and assesses service providers across several key dimensions. As a part of this report, Everest Group updated its classification of 19 service providers on the Everest Group PEAK Matrix™ for KYC-AML BPO into Leaders, Major Contenders, and Aspirants. The PEAK Matrix is a framework that provides an objective, data-driven, and comparative assessment of KYC-AML BPO service providers based on their absolute market success and delivery capability. Based on the analysis, TCS emerged as a Leader. This document focuses on TCS KYC-AML BPO experience and capabilities and includes: TCS position on the KYC-AML BPO PEAK Matrix TCS year-on-year movement on the KYC-AML BPO PEAK Matrix Detailed KYC-AML BPO profile of TCS Buyers can use the PEAK Matrix to identify and evaluate different service providers. It helps them understand the service providers’ relative strengths and gaps. However, it is also important to note that while the PEAK Matrix is a useful starting point, the results from the assessment may not be directly prescriptive for each buyer. Buyers will have to consider their unique situation and requirements, and match them against service provider capability for an ideal fit. Source: Everest Group (2018) unless cited otherwise ® Copyright © 2018, Everest Global, Inc. 2 EGR-2018-24-E-2696 Everest Group PEAK Matrix™ ® KYC-AML BPO – State of the Market with Services PEAK Matrix™ ™ Assessment 2018 | TCS positioned as Leader Everest Group KYC-AML BPO – State of the Market with Services PEAK Matrix™ Assessment 20181 High Leaders Leaders Major Contenders Major Contenders TCS Aspirants Wipro Genpact PWC Cognizant Exela Technologies NTT DATA Accenture HCL Technologies KPMG Mphasis WNS Infosys MarketImpact EXL Sutherland Global Services Intelenet (Measures impact created in the market) in the created (Measures impact Aspirants Capgemini DXC Technology Syntel Low Low High Vision & capability (Measures ability to deliver services successfully) 1 PEAK Matrix specific to KYC-AML BPO services sector Note: Assessment for Accenture, Capgemini, DXC Technology, Intelenet, KPMG, PwC, Sutherland and Syntel excludes service provider inputs and is based on Everest Group’s proprietary Transaction Intelligence (TI) database, service provider public disclosures, and Everest Group’s interactions with insurance buyers ® Copyright © 2018, Everest Global, Inc. 3 EGR-2018-24-E-2696 TCS | KYC-AML BPO profile (page 1 of 3) Everest Group assessment – Leader Measure of capability: Best-in-class Very high High Medium high Medium Medium low Low Not mature Market impact Vision & capability Scope of Market Value services Innovation and Delivery Vision and adoption Portfolio mix delivered1 Overall offered investments footprint strategy Overall Strengths Areas of improvement TCS has a good spread across different buyer geographies and holds a TCS’s KYC-AML BPO delivery is largely offshore and it needs to build considerable market share in the Asia-Pacific, Americas, and the UK its onshore scale to support more judgment-intensive operations It offers a broad scope of services across the KYC-AML BPO value chain While buyers praise TCS for its flexibility and relationship management, with a high share of its revenue coming from the AML line of business they expect TCS to stretch more in terms of developing a deeper domain expertise and thereby bringing in more value addition TCS has advanced technology capabilities, that include its proprietary TCS BaNCS – KYC & AML module for KYC workflow & case management and AML monitoring TCS enjoys high overall buyer satisfaction levels leveraging on its strengths in delivery, implementation, and ability to drive clients to greater success 1 Value delivered score and overall PEAK matrix positioning adversely impacted for those service providers who did not provide adequate information ® Copyright © 2018, Everest Global, Inc. 4 EGR-2018-24-E-2696 TCS | KYC/AML BPO profile (page 2 of 3) Overview Company overview: Tata Consultancy Services (TCS) is an IT, KYC/AML BPO 2015 2016 2017 consulting, and Business Process Services (BPS) organization. TCS’ risk and regulatory services comprising KYC and AML help financial Revenue (US$ million) Not disclosed institutions achieve comprehensive & cost-effective regulatory compliance, Number of FTEs 630-700 2,500-2,700 4,300-4,700 non-linear scale & process efficiencies powered by deep domain expertise, cognitive, and automation & platform solutions. Number of clients 8-10 10-12 12-15 Key leaders Mohan R Veeturi, Global Head, BFSI BPS Ashish Johri, EU Head and Global Head of Capital Markets, BFSI BPS Srividya Konduparthi, Head, Solutions and Offerings (KYC, Risk & Regulatory Compliance, and Capital Markets ), BFSI BPS Muralidharan Raghavan, Head, Financial Crime Compliance CoE, BFSI BPS Technology solutions / offerings specific to KYC/AML Solution name Year launched Description of the solution No. of BPO clients Designed to extract data from digital, scanned, structured, semi-structured, and TRDCC – Digital 2018 unstructured documents. The structured and semi-structured documents are based Not disclosed Extraction on free text search and unstructured documents use NLP to extract data Allows KYC services to be provided seamlessly over blockchain, with valid entity QUARTZ Blockchain 2017 data being captured on the ledger and immediately available to each of the Not disclosed registered and authorized participants on the blockchain IBM Datacap & It is based on IBM datacap license and structured for creating use case scenario of 2017 <3 Insight KYC life cycle in the area of documentation ® Copyright © 2018, Everest Global, Inc. 5 EGR-2018-24-E-2696 TCS | KYC/AML BPO profile (page 3 of 3) Capabilities and key clients KYC/AML BPO FTE mix by segment KYC/AML BPO revenue mix by KYC/AML BPO FTE split by delivery KYC/AML BPO number of clients by FTEs in number geography location buyer size1 Revenue in US$ million FTEs in numbers Number of clients 100% = 4,300-4,700 100% = Not disclosed 100% = 4,300-4,700 100% = 12-15 MEA (6%) Continental Onshore Small AML Europe (2%) 15% 17% 26% 18% APAC 40% 74% 85% 83% 34% UK Offshore KYC Large North America Recent developments specific to KYC/AML (12-18 months) 2018 : Alliance with RSA on cyber crime monitoring; developed predictive analytics conceptualized for KYC/AML with “what if scenarios”; cognitive KYC solution suite for intelligent process automation 2017: Partnered with IBM for KYC data extractions; alliance with Oracle-Mantas on FCC platform; alliance with Tookitaki for analytics-led false positive identification; launched AML e-learning tool for quicker onboarding of AML skilled resources; deployed e-onboarding through C-KYC infrastructure; alliance with BDO on regulatory consulting; cognitive solution on AML transaction analysis; KYC analytics for customer insights beyond compliance; blockchain POC for KYC; support for foreign language training and certification; diversified into specialized service segments / micro offerings; deployed automation in alerts distribution, referrals management, reconciliation, and KYC details initiation for correspondent banking; uberisation of KYC data to drive efficiencies leveraging data lake concept in analytics Key KYC/AML BPO engagements Key KYC/AML BPO delivery locations Client name Region Client since Leading UK bank North America 2017 Fortune 100 European financial services provider North America 2017 Hangzhou Mumbai Pune Hyderabad Fortune 500 financial services and annuity provider North America 2016 Bangalore Chennai Top 3 banking & financial services provider Europe 2015 Leading European multinational bank Europe 2014 1 Buyer size is defined as large (>US$10 billion in revenue), medium (US$5-10 billion in revenue), and small (<US$5 billion in revenue) ® Copyright © 2018, Everest Global, Inc. 6 EGR-2018-24-E-2696 Appendix ® Copyright © 2018, Everest Global, Inc. 7 EGR-2018-24-E-2696 Everest group classification of KYC-AML BPO value chain Know Your Customer (KYC) Anti Money Laundering (AML) Customer identification Enhanced Due File validation & Ongoing case & verification Diligence(EDD) reporting Monitoring management Reporting Document collection Sanctions list screening Completeness check Suspicious Activity Alert management Suspicious Activity Monitoring (SAM) Report (SAR) Document storage and Watch list screening File validation Transaction monitoring Case management Suspicious Transaction retention Report (STR) Customer Identification Politically Exposed Customer risk Cash flow monitoring Payment filtering Currency Transaction Program (CIP) Person (PEP) screening assessment Report (CTR) General profile and Adverse media Data profiling Mystery shopping Fraud prevention Terrorist property negative news search screening reporting FATCA compliance OFAC screening Quality assessment Suspicious Designated Ongoing screening Compliance reporting Nationalist (SDN) screening External data checks AML monitoring for Money Service Businesses (MSB) Document management Analytics ® Copyright © 2018, Everest Global, Inc. 8 EGR-2018-24-E-2696