Banking Business Unit
Girish G Vaidya
Senior Vice President and Head – Banking Business Unit, Infosys
Safe Harbor
Certain statements made in this Analyst Meet concerning our future growth prospects are forwardlooking statements, which involve a number of risks and uncertainties that could cause actual
results to differ materially from those in such forward-looking statements. The risks and
uncertainties relating to these statements include, but are not limited to, risks and uncertainties
regarding fluctuations in earnings, our ability to manage growth, intense competition in IT services
including those factors which may affect our cost advantage, wage increases in India, our ability to
attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time
frame contracts, client concentration, restrictions on immigration, industry segment concentration,
our ability to manage our international operations, reduced demand for technology in our key focus
areas, disruptions in telecommunication networks or system failures, our ability to successfully
complete and integrate potential acquisitions, liability for damages on our service contracts, the
success of the companies in which Infosys has made strategic investments, withdrawal of
governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising
capital or acquiring companies outside India, and unauthorized use of our intellectual property and
general economic conditions affecting our industry. Additional risks that could affect our future
operating results are more fully described in our United States Securities and Exchange
Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31,
2004 and quarterly report on Form 6-K for the quarter ended June 30, 2004. These filings are
available at www.sec.gov. Infosys may, from time to time, make additional written and oral forwardlooking statements, including statements contained in the company's filings with the Securities and
Exchange Commission and our reports to shareholders. The company does not undertake to
update any forward-looking statements that may be made from time to time by or on behalf of the
company.
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 2
The Changing Banking Paradigm
External drivers compel banks to leverage the developments in
Information Technology and continuously innovate
External Drivers
Tool
Result
Regulatory change
and consolidation
Competitive forces
Technology-led
Innovation
Changing Consumer
Product & Service
Innovation
Organizational &
process Innovation
Technological
developments
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 3
Leveraging technology for innovation
Product & Service Innovation
Implication
for
Technology
• Extensible
• Flexible
• Parameterizable
Organizational and process Innovation
•
•
•
•
•
Incorporates best-business practices
Straight Through Processing
Workflows to automate processes
Process Centralization
Single window service
‘’In the past, industry has tended to be overly focused on PRODUCT innovation. Product innovations
at best gives a bank a 3 month head start over competition. PROCESS innovation can put a bank
more than a year ahead of competition. Continued success, therefore, comes from process
innovation. And the ability of the bank to build ongoing process innovation is determined by flexibility
and adaptability of its core banking systems’’ - Chairman of a Large International Bank
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 4
Key imperatives for solution providers
» Support “end-to-end” solution as well as “best-of-breed” approach
» End-to-end solution straddling all banking businesses/ customer channels
» Modular architecture – “plug and play” solution
» Open technologies to easily work with multitude of applications – for e.g.
solutions for niche areas like Regulatory Reporting, Anti Money Laundering
(AML) solutions etc.
» Flexibility/ extensibility
» Greater business agility – USPs, Lower Time-to-Market
» Low dependence on vendor for product launches, process changes etc.
» Better ROI through
»
»
»
»
»
Strong implementation and support capability – upgrades, trouble-shooting
Lower overall cost – hardware, software, network, change management
Future proofing of technology
Scalability
Process efficiencies and resource saving through Straight Through
Processing
» Support global business rules – multi-entity, currency, country, timezones etc.
» Better management control through relevant and timely MIS
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 5
Rules of the Game
Risk
Growth
Lowest overall risk
Most scalable core banking solution
Efficiency
Agility
Cost effective automation
Flexibility beyond parameters
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 6
Infosys offers the lowest overall Risk
» Vendor Viability
» Strong Balance Sheet and visionary management
» End-to-end solution comprising
»
»
»
»
Fast-growing product suite spanning all banking businesses
Business Process Outsourcing
IT Outsourcing
IT Services
» Delivery excellence
» Consistent on-time, on-budget delivery
» Rapid implementation, setting new benchmarks in every market
» Our philosophy is driven by the corporate motto to always strive to
deliver beyond expectations
» Proven and highly scalable solution
» Finacle® powers some of the largest banks world-wide on Open
Systems
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 7
Rules of the Game
Risk
Growth
Lowest overall risk
Most scalable core banking solution
Efficiency
Agility
Cost effective automation
Flexibility beyond parameters
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 8
Growth – most scalable core banking
solution
» By aggressively leveraging
technology, ICICI Bank has in the
last 3 years, grown from a retail
bank to a universal bank
» 2 Mergers in 2 years
» Highest peak workload (450
TPS) handled by any open
transaction system in the World
(Winter Corporation, Waltham,
MA, USA)
2001
• 120 branches
• 2m customers
• 500k online customers
• <1m peak transactions/day
» PNB – one of the largest state
owned banks in India, powered
by Finacle®, is today LIVE with
30m customers with 10,000
users and is scheduled to cross
60m customers and 20,000 users
within the next 12 months
2004
• 450+ branches
• 10m+ customers
• 7m+ online customers
• 8m peak transactions/day
In a Benchmark on HP Superdome, audited by E&Y, Finacle® clocked >16 m transactions
per hour (4,562 TPS) in the online mode (using a real-life transaction mix and measured in
terms of business transactions)
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 9
Rules of the Game
Risk
Growth
Lowest overall risk
Most scalable core banking solution
Efficiency
Agility
Cost effective automation
Flexibility beyond parameters
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 10
Efficiency – cost effective automation
» STP enabled Finacle®
» Eliminates manual intervention
» CARTS (Complaints And Request Tracking System) at ABN AMRO
» Jaguar loan origination system at ABN Amro Bank
» Customer migration to channels with Full Service Banking
» Delivery channel transactions increased from 6% of the total transactions
in 2000 to >70% in 2004 at ICICI Bank
» Enables process integration & orchestration (workflow, document
imaging)
» Integration with Staffware for Trade Services processing at ICICI Bank
» Re-use of services (> 100 business services exposed)
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 11
Rules of the Game
Risk
Growth
Lowest overall risk
Most scalable core banking solution
Efficiency
Agility
Cost effective automation
Flexibility beyond parameters
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 12
Agility – The product manager’s dream
» Extensibility toolkit enables the bank to differentiate and innovate
quickly & cost effectively
» Launching new products
» ABN AMRO – cheque account with loyalty points
» ICICI student accounts
» Product & Process innovation
» Relationship based pricing – family units @ ABN Amro bank
» Responding to changing regulatory requirements
» AML compliance for cash transactions
» Delighting the customers
» Event based multi-channel alerts for retail and corporate customers by
NCB, a leading Caribbean bank
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 13
Flexibility using parameters
» Create segment specific products
using standard parameters
» ICICI Bank Young Stars
» Bank@Campus (student
banking services)
» Extensibility toolkit to create
USPs
» fleXaccount from ABN AMRO –
Savings + Loyalty Points
» Women’s account
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 14
Where we were…
31st March, 2000
Revenue
$ 5.32 m
Employees
193
Countries
8
Products
2
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 15
Substantial investments to further globalize
Finacle® …
» Global product benchmarks completed
» TowerGroup, USA for core banking functionality
» Peppers & Rogers for CRM
» Celent for e-banking in the US
» This year we are investing an additional $ 10 m in Finacle®
» Products
» Substantial increase in our engineering and domain teams to fast track
product developmental activities
» New product offerings
» Web-based cash management
» Wealth management
» Sales
» More feet on the ground globally
» Entry into US and China with a sales team dedicated to products
» Expand sales force in Europe and APAC
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 16
… are already showing returns - grabbing a
larger share of the pie
» Based on analysts’ estimates, we believe the annual size of the market
for our products is approximately $ 1 bn (source – TowerGroup, Celent)
» We believe that an increasingly large number of banks will take a serious relook at their technology solutions
» Typically core banking solution replacements consider a 3 years+ lifecycle
» Revenues get recognized over multiple years
» While we continue to dominate the Indian market. We have further
consolidated our position in West Africa
» We dominate the e-banking space in Saudi Arabia too – 5 out of 5 deals
in the last 24 months
» In the past 12 months, we have signed deals covering new markets
such as USA, Belgium, France, Mainland China, Thailand, Philippines,
South Africa, Australia, etc.
» The recently concluded SBI deal has further increased our footprint by 9
countries, spanning advanced markets
» Awards from ‘The Banker’, London 2004 –
» Mobile Solution of the Year
» “Commendable” Application of the Year – Corporate e-banking
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 17
Where we are
31st March, 2000
30th June, 2004
Revenue ($ m)
5.32
29.20 *
Employees
193
860
Countries
8
29
Overseas sales force
-
10
Products
2
6
CAGR from March 2000 to June 2004 is 49.3%
* LTM
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 18
In conclusion…
» We believe we have an excellent value proposition for our
customers
» We are investing in our products substantially and are committed
to strengthening Finacle’s position as a leading global banking
solution
» In the last 12 months we have entered various new markets
» We believe we are well on our way to consolidating our position
as a leading technology partner for banks worldwide
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 19
Thank You