Hargopal M., Head, Finacle, proclaims that Finacle achieved success in global markets because it was developed with that vision in mind at the outset
B&E: When Finacle was developed by Infosys, was it meant to be a reverse innovation opportunity?
Hargopal M. (HM): Well when we developed Finacle, it was not going to be targeted at any particular market. First of all, Infosys’ ambitions in the product space itself came about in the banking space, because the banking space is a lot more standardised. So, an enterprise class of a product makes sense where there is a general commonality of the business rules. We always had global aspirations for Finacle, and within the banking, the core and other things, you cannot really position for a small niche. For example, a small bank started with our offering at that time. Today it’s around Rs.150 billion in assets. So it means that technology can be a game changer. It doesn’t have to be a certain size – small or medium or large. We also felt that apart from global aspirations, Finacle should be able to service customers across segments.
B&E: So why did India become so important initially?
HM: In a way, if you really look at the growth path, although we had aspirations to make it large, the difference it created was for emerging markets to begin with. These markets did not have any legacy and they had huge diversity in customer segments, et al. The adoption was much higher in these emerging markets. We started with India to begin with, and were able to demonstrate significant compelling value. Between 2000 to 2010, the GDP of India grew by 135%. Deposits grew by around 525%. The lending book increased by 375% for banks as a whole. But if you look at new employees, they grew by only around 5%. This means they managed this growth by bringing in efficiencies with the technology. From the consumer point, they have made a significant difference. Also by using the technology, they have been able to multiply client acquisitions significantly without significant increase in the business cost. The business infrastructure hasn’t grown with the clients they have brought in. If you look at the entire core transformation wave, it started with A-Pac, got adopted in Europe. Now it is going to Western Europe and other advanced markets. The demonstration of the value and the impact of the innovation was that by bringing in the common platform, you are not only able to bring the common business practices, but also able to bring in time to market, time to compliance and a differentiated customer experience. That way, it is very significant. Around 43% of Finacle’s customers now come from the Global 1000 banks.
B&E: When Finacle was developed by Infosys, was it meant to be a reverse innovation opportunity?
Hargopal M. (HM): Well when we developed Finacle, it was not going to be targeted at any particular market. First of all, Infosys’ ambitions in the product space itself came about in the banking space, because the banking space is a lot more standardised. So, an enterprise class of a product makes sense where there is a general commonality of the business rules. We always had global aspirations for Finacle, and within the banking, the core and other things, you cannot really position for a small niche. For example, a small bank started with our offering at that time. Today it’s around Rs.150 billion in assets. So it means that technology can be a game changer. It doesn’t have to be a certain size – small or medium or large. We also felt that apart from global aspirations, Finacle should be able to service customers across segments.
B&E: So why did India become so important initially?
HM: In a way, if you really look at the growth path, although we had aspirations to make it large, the difference it created was for emerging markets to begin with. These markets did not have any legacy and they had huge diversity in customer segments, et al. The adoption was much higher in these emerging markets. We started with India to begin with, and were able to demonstrate significant compelling value. Between 2000 to 2010, the GDP of India grew by 135%. Deposits grew by around 525%. The lending book increased by 375% for banks as a whole. But if you look at new employees, they grew by only around 5%. This means they managed this growth by bringing in efficiencies with the technology. From the consumer point, they have made a significant difference. Also by using the technology, they have been able to multiply client acquisitions significantly without significant increase in the business cost. The business infrastructure hasn’t grown with the clients they have brought in. If you look at the entire core transformation wave, it started with A-Pac, got adopted in Europe. Now it is going to Western Europe and other advanced markets. The demonstration of the value and the impact of the innovation was that by bringing in the common platform, you are not only able to bring the common business practices, but also able to bring in time to market, time to compliance and a differentiated customer experience. That way, it is very significant. Around 43% of Finacle’s customers now come from the Global 1000 banks.
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