IT cos reboot with 'pure play' BFSI delivery units

The banking, financial services and insurance (BFSI) segment is firing again for software companies. Sample this. Over the last two quarters, the largest chunk of revenue has come from this vertical, which typically contributes close to 50% of the flow.

The gains, coming after a lull of almost a year, are mostly due to two developments — an uptick in outsourcing in two of the key markets like the US and Europe, and banks replacing telcos as the new hub of offshoring.

And software companies are in no mood to let the opportunity just go by. To make the most of it, they are setting up specialised financial centres of excellence, catering exclusively to BFSI clients — both national and international — quite unlike other financial platforms like Infosys’ Finacle and TCS BaNCS. In fact, Nasscom expects 10% of new product start-ups to be BFSI units.

“A centre of excellence (CoE) led engagement is the next step of evolution for outsourcing services demanded by mature industries like BFSI,” said Rahul Singh, president-financial services, sales and business services, HCL Technology. “One key difference of working with a CoE is the exceptionally high level of the best-in-class, industry-specific software product or technology related services that are available for deployment in the form of project accelerators, IPs, frameworks and reusable assets.”

Take HCL’s financial services CoEs, which cover several business challenges including risk and regulatory compliance, P&C insurance core systems transformation, derivative trade processing and application support and maintenance.

With rural banking and financial inclusion taking the spotlight, banks and financial companies are now handing out maximum contracts to outsourcing firms for software upgradation and better call centre facilities.

V R Iyer, chairperson and managing director, Bank of India, which earlier this month pulled off a 5-year arrangement with outsourcing firm Aegis to set up a 250-seat delivery centre in Mumbai catering specifically to BFSI clients, said the alliance will enable 65 million bank customers to avail of services without having to contact the bank or visit a branch. “By leveraging contact centres, banks will also be able to clear their non-performing assets (NPAs) or bad loans, by outsourcing collections to a third party,” she added.

Aegis will be providing pure-play voice, followed by social media, analytics, email support, IVR and an NRI help desk to Bank of India, and will follow it up with a similar partnership with another public sector bank shortly. It has closed nine deals involving large public sector banks over the last two years, and will be using the expertise from servicing Fortune 500 banks globally in the last three decades. In India, Aegis has over 1,500 contact centre professionals dealing in BFSI.

“The Indian IT/BPO industry has evolved from a provider of cost-effective services to a balance sheet partner focusing on end-user experience and business transformation... At Aegis, we can see our banking and financial services practice taking the centrestage in leading this growth rate,” said Sandip Sen, global CEO, Aegis.

BFSI companies also derive their mojo from the fact that they are the first adopters of new technologies like social, mobility, analytics and cloud (SMAC) something all software firms are heavily investing in as secure automation is vital for their large portfolio.

Arun Jain, founder, chairman and group CEO, Polaris Financial Technology, which expects its new FT Design Centre to generate additional revenues of $16 million per year by 2015, chipped in: “The new centre has seven innovation labs... Besides, the centre has been able to combine business, operations and technology.”