Surely this is not your foray into India
No. Broadridge was present in India as the brokerage division of ADP. Globally, it was spun off two years ago. ADP has presence in India since 1999. Today we have 800 people who provide IT and BPO services to the parent. But now we want to focus on India as a market.
What made you look at India as a potential market?
We were looking at expansion. There were questions like how do we grow our revenue? We were looking at new products and new markets. We looked at various emerging markets, primarily the BRIC economies. We felt that India has to be taken seriously. We can now offer our global solutions here.
Can you describe your product portfolio?
Our products revolve around the investor community. Some of these products include:
1. Investor communication services: Connecting corporate through with 1000s of clients
2. Electronic proxy voting: If you are a shareholder, you can vote electronically
3. Investor networks: This is a recent launch and works on the lines of any social networking site, like an investor forum
4. Virtual shareholder meeting: Shareholders can participate in meetings via the Web. People can not only participate, but can also vote. Intel is the first company to go live with the solution globally. It held the first ever meeting on May 23, 2009.
Since most of your products are virtual or offered on the Web, can security be a concern?
Ours is an authenticated site. We have the information about accessing the site. The person has to have some or other affiliation with the company to be able to access it. And we have the entire log sheet including names of shareholders. So, if I am spreading rumours, the company knows who is responsible. I don t think anybody in the world provides such service. Its like since you are an authentic person, whatever you post, we can track you down.
Has anybody reported any such breach of security instances?
So far no instances have been reported. To me, people start rumours if they are not identified.
Can you elaborate a bit about how this software works?
Traditionally, after your trade is done, you need to talk to counter parties, depositories, risk and compliance, global systems, etc. A global CIO needs to know global operational risks. For example, the Royal Bank of Canada is using our product in many markets, it is all integrated. We are able to provide consolidated profiles and books at the same time. The information is not only about one particular market.
What are your India plans?
Our primary target will be global banks in India. We want to launch the Virtual Shareholder and the Electronic Proxy voting concepts here. With the Virtual Shareholder, if there is a meeting in Bombay, people across can logon. This also reduces travel cost. Pricing depends on the number of shareholders. It is a fee based on usage. However, there is a one time set-up cost of around $5,000.
Electronic Proxy Voting can also be a stand alone product. There is more participation. This also works on a fee-based usage, and has a one time set-up cost.
What are the challenges as of now?
Both these have tremendous potential. We understand that online participation is pretty low as of now, about 10 per cent. We are looking at India in the long term; say five years from now we need to show adequate revenues and commensurate market share.
In India, we need to get certain changes in regulations. It may take a while to get legalized. We have already started talking to the government and SEBI, and some interested parties. Last six months nothing moved because of the elections. Now with a clear mandate, we need to restart the dialogue. We will look at what regulators will do to bring transparency, what they want to bring to investors.
But then if you are looking at the global banks, most of the decisions are taken by the management abroad. What kind of a partnership are you looking at with the Indian CXOs?
At the end of day, they (Indian CXOs) know the Indian markets the best. They know the product and integration issues. In any large deployment, integration is the key. In the case of any large bank, you are talking about 50-60 large products. It is not like a one-to-one product. Those are the challenges. We will talk to Indian CIO, CTO on those integration challenges among other things.
Have you planned any investments?
Securities processing business normally have limited clientele. We need a couple of people to retain those contacts. For the global clients, we will leverage our global relationship manager.
We provide reliable infrastructure. Ideally, we would like to leverage hardware in the US. We need to communicate to all investors that we run on the IBM mainframe, have a disaster recovery site. If we process the transition in US, costs are incremental. If there are data privacy issues, we may have to invest in India. There is no clarity at this stage. Right now, we need support and sales staff.
When will you actually launch the products here?
We have to talk to the bureaucracy. My feeling is it will take about six months.
