Infosys' Finacle Looks For A New Global Head

BANGALORE: Even as Infosys prepares to demerge its products, platforms and solutions (PPS) business into a separate subsidiary, the company is reorganizing its banking product division Finacle and planning for a change at its helm.

The $8-billion IT services company is in the process of short-listing a new global head for Finacle to break into bigger banks in the US that account for a substantial share of the global banking business. When TOI contacted Infosys on the matter, the company spokesperson said, "We do not comment on matters related to our internal organization."

The appointment would lead to a rejig at Finacle and raises questions about the current head Haragopal M's role in the company. “The mandate for the new boss would be to expand reach, grow existing accounts and build new products for new markets," said Ray Wang, CEO of US-based research firm Constellation Research.

Finacle's presence remains weak in the US. The America market accounts for around 12% of the product's total business even though Infosys gets more than 60% of its services business from there. The company is facing stiff competition in that market from technology vendors like FIS, Fiserv, Oracle Flexcube and Jack Henry & Associates.

Sources said that Infosys is also creating a lean structure for Finacle. The division employed around 6,000 people, but some 1,800 people have been redeployed to other billable projects in the company over the past six months, said sources. Finacle is not expected to be part of the proposed demerged PPS entity, but will likely continue inside the parent firm.

Finacle is a core-banking product that enables all the branches of a bank to access applications from centralized datacentres and improve customer experience across channels. Finacle, which contributes a little over 4% to Infosys’s revenues, is deployed by 183 banks across 84 countries and serves 14% of the world’s banked population. The product enjoys a two-thirds share of commercial banks in India and significant shares in Africa and Asia.

Finacle launched a new version last year in Dubai to expand its presence in the US market. IT spending in North American banks is expected to touch $59.5 billion in 2014, a 4.5% growth over the previous year with a majority of the spends going into expanding digital presence, omni-channel sales and enhancing user experience, said Celent, a research and consulting firm focused on financial services.

Many US banks are cutting costs, but they are making investments in technology as it's seen as important for leverage and scale. “Mobility, for instance, improves access to customer service and drives down the number of routine requests. Cloud is a good way to drive down overall infrastructure costs. Many of these deployments may be more private cloud than public cloud options," said Wang.

Siddharth Pai, president in outsourcing advisory firm ISG's Asia Pacific region, said the demand for core-banking products has remained buoyant in the last quarter. “But what could change the game is the entire solution being delivered from the cloud that could challenge the dominance of existing players. But such a solution is not available as yet," he said.