Indian BPOs: Attractive Destination for FIs

by Prabhu Ram    Feb 13, 2009

"Outsourcing of processes by global banks and financial sectors will now become vivid to reduce costs," said Peter Redshaw, VP-Research, Gartner, at the ongoing Nasscom meet in Mumbai. "The matured IT sector and business processes will make India one of the viable destinations for outsourcing banking processes. Until now financial institutions were wary to outsource processes outside their geography," he added.

Predominantly focusing on expansion strategies, banks and financial institutions in the matured economy have undermined the importance of calculating the operations cost, Redshaw said, adding they will now need to shore operations to the growing economies (India and China ).

Many in the industry have adopted cloud computing model. But due to the inherent disadvantages of cloud model such as exposing the services to the vendor and lack of clear nomenclature and authoritative consortium, banking and financial institutions will need to entirely outsource IT services to reduce cost, Redshaw said.

Raja M.Mitra, senior consultant at World Bank, too, sees countries like India, having track record of proven IT services with large pool of talents, in a better position to bag IT services compared to rest of the world.

Apart from the BPO segment, system integrators in India (which is substantially large, India being a service segment in IT to the world) will also benefit from the present economic scenario.

Peter Coffee, director (platform research) of said that though expansions in IT are under hold at present, IT investments will now focus towards integrating systems to give customers benefits of interoperability, bringing more business to IT integrators.

Together, the Indian IT sector, with mature process models, services and integration, will bring more value and shoulder international customers to reduce operational costs.