Outsourcing in the banking and financial services sector is showing short-term signs of a slowdown for the remainder of the
year due to the economic crisis, but the market will likely regain momentum in early 2009, according to the Market Vista: Q3 2008 report on global outsourcing and offshoring activity by the Everest Research Institute.

"Despite a 40 percent increase in transactions by financial services firms during the third quarter, a slowdown is emerging
due to delays in initiatives and managements' keen focus on the economic crisis," said Eric Simonson, Managing Principal, Everest Research Institute. "In the medium-term, restructuring, integration, and redefinition of sourcing strategies by large
financial firms will lead to an increase in project-based work for suppliers and increased pressures on captives."

Other insights for the third quarter activity include:

-- Overall outsourcing transactions increased 15 percent over the previous quarter, valued at about US $3.2 billion in ACV.

-- Banking, financial services and insurance firms signed 81 transactions, up from 54 in Q2.

-- Momentum from Europe continued to grow with a 10 percent increase in transaction activity.

-- Captives saw significant momentum - 24 new announcements, compared to 18 in Q2 and 16 in Q1.

-- Indian suppliers are experiencing slowdown pressures; hiring by the leading Indian suppliers dropped 22 percent quarter-on
-quarter and 49 percent compared to 2007.