Tablet Adoption Will Grow Manifold In BFSI
The Indian banking industry is undergoing exciting changes today. Although technology adoption and computerization in banks is already underway, a lot more needs to happen to make financial inclusion a reality. In an exclusive interaction with CXOtoday, S. Rajendran, Chief Marketing Officer, Acer India throws light on the changing technology trends in the Indian BFSI segment and how service providers can play a big role in this space by empoweringbanks with the latest technology infrastructure to improve reach and efficiency.
Please throw some light on the latest technology trends in the BFSI segment in India.
The last few quarters have seen tremendous dynamism in the Indian BFSI industry, catalyzed by a number of factors. As mandated by the RBI, there is a predominant need for computerization in the banking and financial sector. Presently, the Indian banking sector is grappling with the issues of financial inclusion. Operating cost of providing financial inclusion and charges levied on the users are important facets of the process of financial inclusion. In a bid to improve the economics of rural banking, new financial inclusion policies have been introduced wherein a bank-appointed agent reaches out to customers in the rural markets and facilitates banking transactions in villages without the typical brick-and-mortar branch model. Herein, technology enablement can play an important role in reducing operating cost of providing banking services, particularly in the rural and unbanked areas. Also, PSUs including cooperative and RRBs (regional rural bank) have been directed to become fully computerized for automation and IT enablement.
However, the Indian banking sector is yet to reach the desired level of technology penetration and inclusion as witnessed in most advanced and even some of the emerging economies. For example, India has a total of 192 banks which have just over 1 lakh branches across the country. The ATM penetration however is woefully low in India at less than 10%. In developed markets like US and Japan it is 100+ percent and countries like Malaysia too has a 60- 70% penetration. Banks should increase this number by at least 10 times in order to reach more customers and make banking inclusion a reality.
A nationwide drive to increase banking automation and synchronization, along with banks expanding their reach to under penetrated areas, are driving the juggernaut for IT adoption in BFSI sector.
Considering the dwindling PC business, with banking staff moving to tablets and smartphones, how is this trend affecting the BFSI segment?
Tablet adoption is a recent phenomenon that is expected to grow manifold in the near future. We have seen an uptake from Canara Bank where the bank management has started a pilot project of distributing our latest 8 inch Windows tablet to their senior managers. Our tablets are being used by the Bank’s senior management as a productivity tool running Enterprise applications.
From the perspective of stationary vs. mobile form factor consumption, most of the BFSI requirements are pertaining to desktops but we are seeing emerging trends where some progressive banks are looking at all-in-ones as a preferred form factor. Some banks have started looking at adopting notebooks as well. In terms of form factors, the split between desktops and notebooks stands at 95 and 5 percent respectively.
Most of the IT consumption has been from the public sector banks (including Canara Bank, SBIs etc.). Private sector banks including ICICI, AXIS Bank, and HDFC are placing orders for increased banking synchronization and automation. We estimate the ratio of PSUs and private sector bank orders to be 80:20.
Tell us something about Acer’s performance in the banking domain over the last few quarters
Our business is divided into the consumer and commercial business (in our parlance, they are referred to as transaction and relationship business respectively).The revenue split of our transactional and relationship business stands as 50:50. In the commercial business, BFSI has been a key growth segment contributing 15 percent to our total revenue 30 percent to our entire relationship business. Out the 26 banks that are currently present in the country, we have won orders from 23 banks, testifying to Acer’s strength in the entire BFSI segment. Acer has a strong 360 degree approach ensuring end to end support to our BFSI customers, including understanding their banking requirements, offering the right technology platforms, testing applications, delivering and installing the desired devices in the wide geographical spread of India, and providing round-the-clock service support for ensuring proper uptime. The company provides desktops, servers, and notebooks to the banks. Tablet adoption has also gained momentum recently. While we provide the hardware, the desired software (operating system as well as dedicated banking software) is preloaded in Acer devices before they are shipped to our customers.
Can you share some details of your large scale orders in the BFSI sector in the recent times
Typically the BFSI projects are region-specific, wherein Acer has won a large percentage of the entire order. The order value of each of these projects is in the range of Rs 1-1.5 crore to Rs 40 crores. In some instances, it is in the nature of an RC (Rate contract) where the procurement is spread over a quarter or a 6 month period. The actual project is executed by System Integrators. Acer is partnering with PCS, CMS, and HCL. In some locations, we are also partnering with Wipro. With the support of SI’s, Acer is supplying its hardware for the first pilot of Dept of Posts’ computerization also.
What is the company’s roadmap in the next one year in the BFSI domain?
Within the relationship segment, BFSI has been the fastest growing market for us with an expected growth rate of 25 percent this year. Acer will continue to stay focused in this segment and get its entire suite of product offerings (DTs, NBs, Servers, Tablets, Projectors and TFT displays) arrayed for this vertical. Along with our robust after-sales support network we are confident that we are well equipped to continue participating in this space in a very healthy manner.
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