Quite a few global IT giants have proved that it takes just one big killer product or application to enter the Fortune 500 league. Finacle was supposed to be that for Infosys! Today, it contributes just about 4% to Infosys’ revenues. What went wrong? by Virat Bahri
Five innovations in the last year have been Treasury-in-a box (for treasury operations), Advizor (to enable delivery of products through a self service channel), Direct Banking (an enabler of branchless banking expansion) and a core banking solution for Regional Rural Banks and inclusive banking. Apart from catering to the demand for core banking solutions in Europe and North America, Finacle has to encounter a new, contrasting mindset in the Asia Pacific. Cyrus Daruwala, MD-Asia Pacific, IDC Financial Insights, comments to B&E, “In India, as with the rest of Asia Pacific, instead of big-bang rip-and-replace approach, banks are focusing on key modules and point solutions within and around core systems (like deposits, loans, channels, payments). This is compelling core players to reassess the way they position and pitch their “we do everything” approach to a more modular approach, catering instead to the banks’ gaps and requirements.” The winners will be banks who can demonstrate that besides a comprehensive suite of abilities, they can also handle individual applications like mobile, rural banking, et al will be the winners in the long run.
Creditably, Finacle has firmly established itself at par with the best in the world. Gartner released its Magic Quadrant for international core banking in July last year, where it compared core banking solutions on two parameters – ability to execute and completeness of vision. Based on these, it divided products into four categories – leaders, challengers, nichers and visionaries. Finacle finds itself in the leader’s quadrant, along with products from SAP, Oracle Financial Services, Temenos Group, Callatay & Wouters, FNIS and Fiserv.
Finacle has shown an impressive growth trajectory in the past few years, but global market trends portend far greater opportunities ahead. And while it may not be the killer application that will take Infosys to the Fortune 500 list, it will remain one of their core areas of competitive advantage, an advantage they have to preserve and strengthen, even if it involves taking the M&A route, which they have long been cautious about, since consolidation in the core banking space is long overdue and happening at a quicker pace now, especially towards ancillary capabilities in the space. That is perhaps the only area where Finacle has to pick up in pace.
Five innovations in the last year have been Treasury-in-a box (for treasury operations), Advizor (to enable delivery of products through a self service channel), Direct Banking (an enabler of branchless banking expansion) and a core banking solution for Regional Rural Banks and inclusive banking. Apart from catering to the demand for core banking solutions in Europe and North America, Finacle has to encounter a new, contrasting mindset in the Asia Pacific. Cyrus Daruwala, MD-Asia Pacific, IDC Financial Insights, comments to B&E, “In India, as with the rest of Asia Pacific, instead of big-bang rip-and-replace approach, banks are focusing on key modules and point solutions within and around core systems (like deposits, loans, channels, payments). This is compelling core players to reassess the way they position and pitch their “we do everything” approach to a more modular approach, catering instead to the banks’ gaps and requirements.” The winners will be banks who can demonstrate that besides a comprehensive suite of abilities, they can also handle individual applications like mobile, rural banking, et al will be the winners in the long run.
Creditably, Finacle has firmly established itself at par with the best in the world. Gartner released its Magic Quadrant for international core banking in July last year, where it compared core banking solutions on two parameters – ability to execute and completeness of vision. Based on these, it divided products into four categories – leaders, challengers, nichers and visionaries. Finacle finds itself in the leader’s quadrant, along with products from SAP, Oracle Financial Services, Temenos Group, Callatay & Wouters, FNIS and Fiserv.
Finacle has shown an impressive growth trajectory in the past few years, but global market trends portend far greater opportunities ahead. And while it may not be the killer application that will take Infosys to the Fortune 500 list, it will remain one of their core areas of competitive advantage, an advantage they have to preserve and strengthen, even if it involves taking the M&A route, which they have long been cautious about, since consolidation in the core banking space is long overdue and happening at a quicker pace now, especially towards ancillary capabilities in the space. That is perhaps the only area where Finacle has to pick up in pace.
Virat Bahri
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Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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