Everest Group PEAK Matrix™ for Mortgage - accenture.com · estimates which leverage Everest Group’s proprietary Transaction ... Top-five commercial bank. Origination: North

Copyright © 2017 Everest Global, Inc.This document has been licensed for exclusive use and distribution by Accenture

EGR-2017-11-E-2452

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Everest Group PEAK Matrix™ for Mortgage BPO Service Providers

Focus on AccentureDecember 2017

2Copyright © 2017, Everest Global, Inc.EGR-2017-11-E-2452

Introduction and scope

Everest Group recently released its report titled “Mortgage BPO – Service Provider Landscape with PEAK Matrix™ Assessment 2017.” This report analyzes the changing dynamics of the mortgage BPO landscape and assesses service providers across several key dimensions.

As a part of this report, Everest Group updated its classification of 16 service providers on the Everest Group PEAK Matrix for mortgage BPO into Leaders, Major Contenders, and Aspirants. The PEAK Matrix™ is a framework that provides an objective, data-driven, and comparative assessment of mortgage BPO service providers based on their absolute market success and delivery capability. Everest Group also identified three service providers as the “2017 mortgage BPO Star Performers” based on the strongest forward movement demonstrated on the PEAK Matrix™ year-on-year.

Based on the analysis, Accenture emerged as a Leader. This document focuses on Accenture’s mortgage BPO experience and capabilities and includes:

Accenture’s position on the mortgage BPO PEAK Matrix

Detailed mortgage BPO profile of Accenture

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.

https://www2.everestgrp.com/reportaction/EGR-2017-11-R-2444/toc


Everest Group’s classification of the mortgage valuechain

Analytics

Regulatory compliance and reporting

Origination Servicing

Defaultmanagement

Refinance / loan modification

Short sale / foreclosure

Credit/collateral evaluation

Credit risk assessment

Fraud risk assessment

Documentverification

Rate locking

Sourcing

Lead generation

Applicationmanagement

Loan pricing

Loan document indexing and verification

Underwriting

Collateral risk underwriting

Underwritingdecision

Underwritingaudit

Riskmanagement

Securitizationsupport

Loan setup

Payment processing

Collections

Credit reviews

Collateral review

Post funding review

Loan funding

Document draw

Condition clearing and validation

Wire request and approval

Post closure document review

Purchase review and approval

Compliance/post closure

compliance1

Securitization support

ProcessingAccount closure /

foreclosure

Securitization

Pre-securitization

Core securitization

Quality assurance Risk management

Document support

Regulatory compliance

1 The United States compliance follows the mortgage electronic registration system and the HUD1 settlement statementNote: This report covers vertical-specific BPO within the mortgage space. It does not include coverage of horizontal business processes such as F&A, HR,

procurement, and contact centers


* Service providers scored using Everest Group’s proprietary scoring methodology given on page 12, 13 and 14Note: Assessment for Capgemini, DXC Technology, EXL, and IBM excludes service provider inputs on this particular study, and is based on Everest Group’s

estimates which leverage Everest Group’s proprietary Transaction Intelligence (TI) database, ongoing coverage, service provider public disclosures, and interaction with buyers

Source: Everest Group (2017)

Everest Group Mortgage BPO – Service Provider Landscape with Services PEAK Matrix™*

Mortgage BPO vision & capability(Vision & strategy, scope of services offered, innovation & investments, and delivery footprint)

Mar

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High

LowLow High

AccentureTCS

HCL

Genpact

Sutherland

Wipro

InfosysIBM

Mphasis-Digital Risk Firstsource

Cognizant

DXC Technology

IntelenetEXL

WNSCapgemini

Aspirants

LeadersMajor Contenders LeadersMajor ContendersAspirantsStar Performers

Everest Group PEAK Matrix™Mortgage BPO | Accenture positioned as Leader


Market impact Vision & capability

Market adoption Portfolio mix

Value delivered1 Overall

Scope of services offered

Innovation and

investmentsDelivery footprint

Vision and strategy Overall

1 Value delivered score and overall PEAK matrix positioning adversely impacted for those service providers who did not provide adequate information

Strengths Areas of improvement

Accenture has a robust strategy for developing digital and end-to-end offerings for clients in addition to traditional BPO services

It has invested in advanced analytics solutions over the last few years, which has positioned it to offer an enhanced customer experience to clients

It has also ramped up its technology capabilities inorganically with platform, augmentation, and tie-and-run solutions, which helps it to provide end-to-end solutions to clients looking for judgment-intensive mortgage service

Accenture can further develop its risk management and regulatory compliance capabilities, given the increasing complexity of regulations in the United States

It needs to ramp up its servicing capabilities to provide end-to-end services in this space, especially since the market demand for servicing capability is on the rise

There is scope to more effectively operationalize its vision in order to embed outcome-based pricing models such as gainsharing in its deals

Measure of capability: Best-in-class Very high High Medium high Medium Medium low Low Not mature

Accenture | Mortgage BPO profile (page 1 of 6) Everest Group assessment1 – Leader


Mortgage BPO 20151 20161 20171

Revenue (US$ million) Not disclosed

Number of FTEs 3,250 3,500 3,350

Number of clients 90 90 90

Recent acquisitions and partnerships 2013: Developed following platforms with the acquisition of Mortgage Cadence:

– Planned to launch a new version of Enterprise Lending Center (ELC) platform to offer lenders enhanced service ordering and regulatory support

– Announced its agreement to license FirstClose – an integration hub software platform that will enhance lenders capabilities within Mortgage Cadence’s program

2013: Completed its acquisition of majority stake in Vivere Brasil, a mortgage-processing technology company, to enhance mortgage service capabilities and help banks increase their efficiency and capacity for processing loans

2011: Completed its acquisition of Zenta, a provider of residential and commercial mortgage processing services in the United States, to expand credit industry capabilities

Recent developments2016: Developed Mortgage-and-Compliance-as-a-Service (MCaaS) to help mortgage and home equity lenders reduce overall cycle times, scale volume on demand, improve regulatory compliance, and reduce the potential for repurchase risk, at a predictable outcome-based cost

Suite of services Communications, media, and technology – software & platforms and electronic &

high tech Financial services – banking and capital market insurance Health and public services Products – consumer goods, retail, travel services, and industrial life sciences Resources – chemical & natural resources, energy, and utilities

Company overviewAccenture is a leading global professional services company, providing a broad range of services & solutions in strategy, consulting, digital, technology, and operations. It combines experience & skills across more than 40 industries and all business functions with more than 411,000 FTEs serving clients in more than 120 countries. It works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders.

Key leaders Pierre Nanterme, Chairman & CEO Jo Deblaere, Chief Operating Officer David P. Rowland, Chief Financial Officer

Headquarter: Dublin, IrelandWebsite: www.accenture.com; www.accenture.com/creditservices

Accenture | Mortgage BPO profile (page 2 of 6)Overview

1 Twelve months ending June 30 of any particular year, i.e., from July 20XX to June 20XX+1Source: Everest Group (2017)

http://www.accenture.com/

http://www.accenture.com/creditservices



Accenture | Mortgage BPO profile (page 3 of 6) Key delivery locations

Sacramento

San Antonio

New YorkCharlotte

Sao Paulo

Bangalore ManilaChennaiMumbai


Mortgage BPO FTE split by delivery locationFTEs in numbers

Mortgage BPO client split by buyer size (buyer revenue)1

Number of clients

Mortgage BPO revenue mix by geographyRevenue in US$ million

Mortgage BPO FTE mix by segmentFTEs in numbers

Key mortgage BPO engagements

Client name Category (origination, securitization, or servicing) Region Client since

Top-10 U.S. mortgage banker Origination North America 2015

Top-five commercial bank Origination North America 2014

Top-30 U.S. financial institution Servicing North America 2013

Top-five U.S. financial institution Origination North America 2012

Top-five mortgage servicer Servicing North America 2009

100% = 3,350 100% = Not disclosed

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)Note: Based on contractual and operational information as on June 2017


63%

37%

Servicing

Originations

70%

23%

7%

100% = Not disclosed100% = 3,350Nearshore

Offshore

OnshoreNot disclosed Not disclosed

Accenture | Mortgage BPO profile (page 4 of 6)Capabilities and key clients


Application Category Year launched Description No. of BPO clients

Accenture operations navigator Origination Not disclosed A finance and accounting suite of tools, providing a central portal that gives joint visibility into the client organizations’ operational performance and critical business process data

Not disclosed

Insurance Tracking & Analysis (ITAC)

Origination Not disclosed A comprehensive platform that manages insurance tracking and compliance

Not disclosed

iWorks@ Origination Not disclosed A decision engine that dynamically selects Quality Assurance and Quality Control (QA/QC) reviews specific to the associate performing the review

Not disclosed

Mortgage cadence LOS Origination 1999 A credit services proprietary technology platform Not disclosed

Mortgage cadence workflow

Mortgage cadence document engine and document repository

Prioritization, Allocation, Routing (PAR)

Origination Not disclosed An algorithm that systematically routes and reassigns loans based on loan criteria, turn-time requirements, and licensing

Not disclosed

Vivere (Brazil) Origination Not disclosed An end-to-end consumer mortgage and construction-lending contract processing platform that helps to create workflows and business rules by product and origination channel

Not disclosed

Accenture | Mortgage BPO profile (page 5 of 6)Technology solutions/tools




Risk management support Details No. of BPO clients

Credit risk Inspection and validation of adherence to Government-Sponsored Enterprise (GSE) credit requirements encompassing credit, income, asset, collateral, vesting, various insurance requirements, vesting, and lien position

Not disclosed

Operations risk Inspection and validation of proper process adherence as it is executed to insure staff, operating systems, and controls to prevent repurchase or indemnification

Not disclosed

Market risk Not applicable Not disclosed

Liquidity risk Inspection and validation of adherence to GSE credit requirements for secondary market saleability encompassing credit, income, asset, collateral, vesting, various insurance requirements, vesting, and lien position

Not disclosed

Regulatory risk Inspection and validation to adhere to regulatory policies governing lending practices such as TRID/ KYBO, ATR/QM, and appraisal independence

Not disclosed

Regulatory reporting support List of regulations Description No. of BPO clients

United States regulations TRID, TILA, HOEPA, HPML, KBYO, Flood, Patriot Act, SAFE Act, GSE guides, and credit policy

BPO services include an independent audit against Loan Origination System (LOS) data entry, physical documents, regulation requirement, and agent interpretation to report out results. Results can require creative payments and additional document requirements to meet acceptability and redisclosure

Not disclosed

United Kingdom regulations

Not applicableEuropean Union regulations

Local regulations

Accenture | mortgage BPO profile (page 6 of 6) Risk management & regulatory reporting


Appendix


Everest Group PEAK Matrix for mortgage BPO

Vision & capability(Vision & strategy, scope of services offered, innovation & investments, and delivery footprint)

High

LowLow High

Leaders

Aspirants

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Everest Group PEAK Matrix™ is a proprietary framework for assessment of market impact and vision & capability

Major Contenders


Services PEAK Matrix™ evaluation dimensions

Measures impact created in the market –captured through three subdimensions

Mar

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mpa

ct Major Contenders

Leaders

Aspirants

Measures ability to deliver services successfully.This is captured through four subdimensions

Vision for the client and itself; future roadmap and strategy

Vision and strategy

Depth and breadth of services portfolio across service sub-

segments / processes

Scope of services offered

Delivery footprint and global sourcing mix

Delivery footprint

Innovation and investment in the enabling areas, e.g.,

technology IP, industry/domain knowledge, innovative commercial constructs,

alliances, M&A, etc.

Innovation and investments

No. of clients, revenue base, and YOY growth, deal value/volume

Market adoption

Diversity of client/revenue base across industries, geos,

enterprise size class

Portfolio mix

Value delivered to the client based on customer feedback

and other measures

Value delivered

Vision & capability


Everest Group confers the Star Performers title on providers that demonstrate the most improvement over time on the PEAK Matrix™

This slide to be used ONLY for “Star Performers”Star Performers are identified by top quartile performance improvement on the X and Y axes for each segment

MethodologyEverest Group selects Star Performers based on the relative YOY improvement on the PEAK Matrix

Year 1

Year 0

Mar

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Vision & capabilityWe identify the service providers whose improvement ranks in the top quartile and award the Star Performer rating to those service providers with: The maximum number of top-quartile performance

improvements across all of the above parametersAND

At least one area of top-quartile improvement performance in both market success and capability advancement

The Star Performers title relates to YOY performance for a given service provider and does not reflect the overall market leadership position, which is identified as Leader, Major Contender, or Aspirant.

In order to assess advances on market impact, we evaluate each service provider’s performance across a number of parameters including: Yearly ACV/YOY revenue growth # of new contract signings and extensions Value of new contract signings Improvement in portfolio mix Improvement in value delivered

In order to assess advances on vision andcapability, we evaluate each service provider’s performance across a number of parameters including: Innovation Increase in scope of services offered Expansion of delivery footprint Technology/domain specific investments

ILLUSTRATIVE EXAMPLE FOR SERVICES PEAK MATRIX


FAQs (page 1 of 2)

Does the PEAK Matrix assessment incorporate any subjective criteria?Everest Group’s PEAK Matrix assessment adopts an objective and fact-based approach (leveraging service provider RFIs and EverestGroup’s proprietary databases containing providers’ deals and operational capability information). In addition, these results are validated / fine-tuned based on our market experience, buyer interaction, and provider briefings

Is being a “Major Contender” or “Aspirant” on the PEAK Matrix, an unfavorable outcome?No. PEAK Matrix highlights and positions only the best-in-class service providers in a particular functional/vertical services area. There are a number of providers from the broader universe that are assessed and do not make it to the PEAK Matrix at all. Therefore, being represented on the PEAK Matrix is itself a favorable recognition

What other aspects of PEAK Matrix assessment are relevant to buyers and providers besides the “PEAK Matrix position”?PEAK Matrix position is only one aspect of Everest Group’s overall assessment. In addition to assigning a “Leader”, “Major Contender” or “Aspirant” title, Everest Group highlights the distinctive capabilities and unique attributes of all the PEAK Matrix providers assessed in its report. The detailed metric level assessment and associated commentary is helpful for buyers in selecting particular providers for their specific requirements. It also helps providers showcase their strengths in specific areas

Does PEAK Matrix assessment incorporate “customer satisfaction” as an evaluation criteria/metric?Everest Group does not have “customer satisfaction” as a separate metric in its PEAK evaluation framework. This is primarily because it is challenging to obtain interviews with a meaningful number of reference buyers for each service provider. Also, “customer satisfaction” is a highly subjective and opinion driven metric and there is no foolproof methodology to normalize this input. That said, we validate our PEAK results through buyer interaction and capture some consistent “spikes” or “lags” in performance through metrics such as “renewal rate”, etc.

What are the incentives for buyers and providers to participate/provide input to PEAK Matrix research? Participation incentives for buyers include a summary of key findings from the PEAK Matrix assessment Participation incentives for providers include adequate representation and recognition of their capabilities/success in the market place,

and a copy of their own “profile” that is published by Everest Group as part of the “compendium of PEAK Matrix providers” profiles


FAQs (page 2 of 2)

What is the process for a service provider to leverage their PEAK Matrix positioning, or “Star Performer” status ? Providers can use their PEAK positioning or “star performer” rating in multiple ways including:

– Issue a press release declaring their positioning/rating– Customized PEAK profile for circulation (with clients, prospects, etc.)– Quotes from Everest Group analysts could be disseminated to the media – Leverage PEAK branding across communications (e-mail signatures, marketing brochures, credential packs, client presentations, etc.)

The provider must obtain the requisite licensing and distribution rights for the above activities through an agreement with the designated POC at Everest Group

Does the PEAK Matrix evaluation criteria change over a period of time?PEAK Matrix assessments are designed to serve present and future needs of the enterprises. Given the dynamic nature of the global services market and rampant disruption, the assessment criteria are realigned as and when needed to reflect the current market reality as well as serve the future expectations of enterprises

About Everest Group

Everest Group is a consulting and research firm focused on strategic IT, business services, and sourcing. We are trusted advisors to senior executives of leading enterprises, providers, and investors. Our firm helps clients improve operational and financial performance through a hands-on process that supports them in making well-informed decisions that deliver high-impact results and achieve sustained value. Our insight and guidance empower clients to improve organizational efficiency, effectiveness, agility, and responsiveness. What sets Everest Group apart is the integration of deep sourcing knowledge, problem-solving skills and original research. Details and in-depth content are available at www.everestgrp.com.

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Everest Group PEAK Matrix™ for Mortgage - accenture.com · estimates which leverage Everest Group’s proprietary Transaction ... Top-five commercial bank. Origination: North