Infosys to emerge from the banking sector
Bangalore: IT major Infosys sees more opportunities emerge from the banking sector as banks merge their business and technology systems in order to consolidate their operations and integrate better with the acquired entities. Some of the top customers of Infosys in this space include Bank of America (BofA), Royal Bank of Scotland (RBS) and ABN Amro, reports the Economic Times.
Consolidation among the top U.S. and European banks is bringing new business for Infosys, which derives around 33 percent of its revenue from the banking and financial services (BFSI). Potentially, some of these individual contracts worth around $500 million each. "There are six integration projects we are currently looking at," said Ashok Vemuri, Senior Vice-President and Global Head for Banking and Capital Markets Business at Infosys. "Fortunately, we have landed on the right side in most of these mergers and acquisitions (M&A) developments," he added.
While BofA is in the process of integrating its systems with Merrill Lynch, RBS is attempting to consolidate its IT systems with ABN Amro. As these banks merge, they now face an uphill task of integrating their software applications, consolidating their datacenters and other trading platforms into a single entity, so that their customers are able to transact without facing any merger-related issues.
Infosys was able to increase and sustain its revenues from the BFSI segment even as business from manufacturing and telecom customers were coming down during the past two quarters. Revenues from BFSI contributed around 33.5 percent of the company's total revenues during the quarter ended September 30, 2009, even as revenue contribution from manufacturing and telecom customers declined to 19.3 percent and 16.2 percent, respectively. However, M&A practice is not an area where Indian companies have been positioned as leaders yet, especially with top consultants of the world, including Deloitte and Accenture, being the most preferred vendors.
"A year ago, Infosys was not among the ones to be called for such high end M&A related consulting, a Deloitte was called," said Vemuri who also heads Infosys Strategic Global Sourcing Business focused on large multi-year contracts. "However, we are now increasingly getting pulled into it across the projects related to change management, developing common systems with our front-end consulting capabilities," he added.
