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Deciphering the hype around i-flex

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CIOL Bureau
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CIOL Bureau

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BANGALORE: Go to any part of the world and chances are the backend processes of banks are running on a product developed in India. Two of the top three banking products are from Indian companies. Such is the penetration of the Indian banking products in the global market.

So much so that last year, Flexcube, i-flex Solutions' flagship banking software product, was rated as the top banking product for the year 2002 by International Banking Systems (IBS). IBS, is a UK-based publishing house that focuses on the global banking sector.



Having trailed behind Swiss banking software major, Temenos in the second position, for a long time i-flex tasted success last year, in what can be said a photo-finish. i-flex, registered just four more products installed, taking its tally to 36 as against 32 of Temenos.

Indian banking software products arrived at the international scene when i-flex reached the top spot and Infosys took the number three ranking behind Temenos.



i-flex has emerged the big brother in the Indian packaged software for the banking sector. And obviously, questions abound. Is the hype around I-flex (erstwhile CITIL, Citibank’s IT arm) and its products for real?



i-flex claims Flexcube contributes 63 per cent of its Rs 615 crore annual turnover. This makes it the highest net revenue earner in this category of software products. It towers over its nearest competitor, Finnacle from Infosys, by over 2 times.

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In fact, if one counts the total revenues from the four nearest Indian players, it still falls short of the Flexcube revenues. A detailed table of the Indian banking products and its contribution to company's overall revenue is a clear testimony, why Flexcube is rated on top.

A revenue comparison of banking software product vendors:













































































Name of the Company



Product Name



% contribution to the revenue (total revenue in Rs. crore)



Contribution in Rupees ( in Rs. crore)



ICICI Infotech



Newton



5-7% (230 )



12 - 16



Polaris Software Labs



Orbi One



14% (428)



60



Infosys Technologies



Finnacle



4.6% (3602 )



167



i-flex Solutions



Flexcube



63% (615 )



387



TCS



Quartz



ETreasury



Integrated Standard



Banking System



Bank On ABM



2% (6281)



100 from all its S/W products



Nucleus Software



FinnOne



32% (89)



28

*CIOL Estimates*

* The figures in brackets represent the total revenue of the company in crore.

In retrospect, the 9-year lead has helped i-flex leave its competitors way behind. However, not everybody is perturbed by the lead as the Polaris Software spokesperson Raghuram Balakrishnan says, "Six months into the market, we have managed to clock some prestigious wins, including ABN AMRO, Allianz, Deutsche Bank for our OrbiOne core banking product."

Polaris also claims superiority by counting the number of IPRs, a total of 57, it acquired after its merger with Orbitech.

There is reason for such posturing. It’s in the pedigree. Until last year, Orbitech was a captive product for Citibank, just like i-flex in its previous avataar. Both are shedding Citi dependence and adding non-Citi clients. As of last year, Citibank's contribution to i-flex revenue had slipped from 44 to 40 percent.

"Our marketing strategies are in place and we are confident that we would soon be on par if not overtake our global competitors (read i-flex, Temenos et al.)," says Polaris spokesperson.

However not all think that Flexcube is all hype. "If it is used by the world's largest bank, then it should have its own standards," says ICICI Infotech’s MB. Battliwala. "However, I have not come close to work with the product to give a user’s perspective or from a technological stand point. But it should get the credit that is due."

TCS is the old horse in this trade. It has a better penetration in the domestic bank branch, automation segment. That has been its traditional market. However, with the introduction of its retail banking software ISBS and wholesale banking software Quartz, the company is knocking doors at in international market.

However, the battle seems to be between Flexcube and Finnacle. Sivan Securities’ V Shankar calls i-flex a company with good marketing strategy and great implementation partners spread across its target geography.

If there’s one thing going wrong for Flexcube, then it is in the User interface. One of the customers of Flexcube Shankar polled succinctly puts it, the Flexcube product architecture is robust, but its user interface does not hold a candle to Finnacle.

As they say, to reach the top is a big struggle, but to stay there is a bigger challenge.

(With Research inputs from Smitha M, CIOL)

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