Banking leaders working relentlessly to create sustainable business growth

BANGALORE, INDIA: The Finacle product of Bangalore-based Infosys has been classified as a "leader" for the seventh time in row in the Gartner Magic Quadrant for international core banking and as a "leader" in The Forrester Wave: Global Banking Platforms as well. Ovum rated Finacle ahead of all global vendors in its technology assessment.

In an interview with CIOL, Haragopal M, senior VP and global head - Finacle, Infosys, shares details on new version of Finacle product and market strategy. Excerpts:

CIOL: Can you share with us details on adoption of Finacle product worldwide and India figures?

Haragopal: Finacle powers 179 banks across 84 countries across all key global regions including Africa, Americas, Europe and Asia.

Currently, 14 percent of the global banked population is serviced by Finacle. And while 24 percent of Finacle clients are among the G2K corporations, around 44 percent of banks leveraging Finacle are among the world's top 1000.

Since 2005, there has been 150 percent growth in the number of global banks powered by Finacle and 122 per cent growth in the number of countries where Finacle is present.

In India, over 50 percent of public and private sector banks and eight foreign banks are powered by Finacle. In fact, Finacle powers seven of the top 10 banks in India and has a market share of 69 percent among the top 36 banks in India (25 of the top 36 banks are powered by Finacle). Our solution for Regional Rural Banks has seen good traction and we now have a 54 percent market share in this segment.

Overall, with Finacle, we now serve approximately 40 per cent of the banked population in India.

Some of the Indian banks powered by Finacle include ICICI Bank, Kotak Bank, Axis Bank, IDBI Bank, foreign operations of State Bank of India, United Bank of India, UCO Bank, Development Credit Bank, Federal Bank and Ratnakar Bank among others.

Globally, Finacle is the solution of choice at Tetrad Bank (Zimbabwe); Bank One (Mauritius); ING (Belgium); Credit Suisse (Switzerland); Emirates NBD (UAE); Nykredit (Denmark); ALEXBANK (Egypt); Arab National Bank (Saudi Arabia); Bank Dhofar (Oman); First Bank of Nigeria (Nigeria); Hatton National Bank (Sri Lanka); PostBank Uganda Ltd (Uganda) among others.

 

CIOL: What are the new trends you see with the banking industry. How will the new version of Finacle address them?

Haragopal: Banking leaders are working relentlessly to create sustainable business growth in these challenging times. Most banks are looking to refresh their existing business models and enhance return on equity by delivering higher operational efficiencies and managing costs.

The focus is rightly shifting towards accelerating innovation execution. Banks today are keen on making their business truly customer specific and are leveraging emerging technologies like mobility, social, commerce, cloud and big data to create and sustain competitive differentiation and offer superior customer experience.

However, severe business-related complexities act as a big impediment. Research indicates that almost 84 per cent of annual IT budgets are today consumed to support existing business operations and organic growth, leaving little to transform the business to create new revenue streams.

Complexity in the business technology is a significant driver behind this imbalance. It's the complexity of the existing business technology landscape, riddled with multiple product centric silos and legacy applications, that restrict them to innovate faster, reduce costs and be responsive to the evolving customer demand.

Modernizing the core banking platform may therefore seem like an obvious choice, but this is a demanding task. And in today' environment banks cannot wait for three to five years to yield the benefits of modernization.

But, what if transformation could be simplified by breaking it up into easily manageable chunks and achieved in a progressive manner. And modernization benefits start flowing in months instead of years.

It's this thinking that has been the catalyst for the launch of Infosys Finacle 11E, the latest release of the Finacle universal banking solution. Finacle 11E is an advanced universal banking solution that simplifies banking.

CIOL: Does the new Finacle version allow customers to incorporate key solutions lending directly to important market needs?

Haragopal: As banks aim to re-invent their business and navigate the current challenges in the macro-economic environment, Finacle 11E promises a simplified approach to banking transformation.

Its componentized structure makes it easy for banks to quickly target new customer segments. Banks can also choose the components they need and replace their existing systems one step at a time, to progressively modernize their business.

Its enterprise class capabilities helps banks break their technology silos and eliminate duplicate applications. This helps banks reduce their cost of operations and simplify their processes. With this release, Finacle has added six new enterprise components to its suite.

 

Finacle 11E builds on Finacle's success of delivering powerful benefits to global banks, including an annual rate of return of over 55 percent on core banking transformation investments (Based on a client case study prepared by independent research firm Aite). It also facilitates the launch of new products and services faster - Finacle clients have experienced an average improvement of 33 percent in their time to market (based on an independent Business Value Articulation (BVA) survey conducted with 46 Finacle clients by Feedback Business Consulting Services, a third party independent market research organization).

CIOL: Banks in the US are going ahead with major up-gradations. How is Infosys planning to tap this opportunity?

Haragopal: Infosys has invested significantly in the US market over the last five years. In fact, we are the only international banking solutions vendor that has been in this market for so long and have designed localisation capabilities to fulfil requirements around US specific products, payments and compliance requirements.

We are also, possibly, the only international vendor that covers Federal compliance and is also considering state-level compliance requirements.

We are indeed well placed to take advantage of uptake in demand on new modern solutions and are in active discussions with many of the financial institutions in the industry.

CIOL: Moving forward, which are the new markets that you plan to tap in the coming years?

Haragopal: Today, Finacle powers banks across 84 countries and in key global regions including Africa, Americas, Europe and Asia. We see opportunities across all these markets. Over the last couple of years, emerging markets in Asia and Africa remained buoyant while activity in Europe and the Americas has been rather slow. With signs of the economy recovering and an increase in requirements from advanced economies, we anticipate stronger demand across the board.