The Hindu Business Line : SAS Institute targets public sector banks

"SAS's initial focus will be on the top two or three public sector banks that have an extensive core banking infrastructure. Several PSU banks have floated enquiries about business intelligence."

Mumbai , Dec. 19

SAS Institute Inc is looking at tapping public sector banks for its business intelligence solutions.

The company is negotiating with Union Bank of India and Punjab National Bank, with additional plans to rope in the Union Government as its client.

SAS already counts ICICI Bank, HDFC Bank, Standard Chartered Bank and HSBC among its clients.

In an interview to Business Line, Mr Jim Davis, Senior Vice-President and Chief Marketing Officer, spoke about the strategy of SAS for the Indian market pertaining specifically to the banking sector. Excerpts:

As part of your visit to India, what are you looking at in the banking sector for SAS?

Our visit to India is multi-faceted. Firstly, we look to grow our presence in India and invest in expansion across our Delhi, Mumbai, Pune and Bangalore establishments. For SAS worldwide, banking represents 36 per cent of total revenue and in India, it is about 40 per cent.

Who are your multinational clients and how have your global relationships with them helped translate into local business opportunities?

Initially, we had major accounts such as Citibank, HSBC and American Express when they set up base in India. Following that, our focus has been on the private sector banks wherein we have done fairly well, having bagged clients such as ICICI Bank, HDFC Bank, IDBI Bank and Standard Chartered Bank. Next in line are obviously public sector banks, which is where our focus lies currently.

What are your plans for public sector banks?

Our strategy for PSU banks would definitely be to target their retail businesses, to start with. Banks are increasingly focusing on retail banking and customer acquisition and SAS's expertise lies in customer intelligence and acquisition.

In terms of technology, PSU banks are not as advanced as their privately held counterparts. What are the challenges you are facing in this regard and how can SAS help these banks?

One of the most pertinent challenges we face with Indian PSU banks is data quality. Given that only a limited number of banks have implemented core banking solutions, aggregating and cleaning data from across branches can be a cumbersome task.

SAS's initial focus will be on the top two or three public sector banks that have an extensive core banking infrastructure. Several PSU banks have floated enquiries about business intelligence.

We have recently put in a bid for Union Bank and a submission for Punjab National Bank is due shortly. They are among the few banks that have made a move in this direction.

Technology adoption depends also on the ability to pay despite its benefits. Have you faced any constraints in this regard?

The benefits are quantifiable, in that if I tell a bank that it can increase its revenues by $10 million with help from a software that only costs a fraction of that amount, then cost becomes a non-issue. Hence, we are not experiencing such constraints anywhere in the world currently.

Does SAS customise its solutions for banks ?

Absolutely. What we provide is a framework that serves as a common base in terms of the ability to integrate data. And then we provide a banking intelligence model, which allows consolidation of information for a particular bank.

A standard model with no differentiation would give banks no edge over each other.

Does SAS help banks improve their data quality?

Yes, from a revenue perspective that is more than half our business i.e., the integration and cleansing of data. Every sector has that issue today - using information to drive business and the number one issue is data quality. SAS solutions are in two parts. The first is the data quality part and then is the solution that sits on top of it to use the quality data.

Is SAS looking at increasing its employee base in India? The total number of SAS employees in India is about 175, inclusive of the development centre in Pune that employs 130 people. The rest focus on sales and marketing. We are not stopping the hiring cycle any time soon and there is no cap to how many people we will hire.

In terms of tapping the Government vertical, how has SAS progressed in India? Have you been in any negotiations here?

Seeing as this is a focus for us in the coming year, we have been in negotiations with several Ministries, the Census Bureau and the Finance Ministry, among others.

Within financial services, insurance is a growing market. What is SAS's play therein?

We are doing a lot in insurance right now. Insurance companies could look at business intelligence in terms of the risk involved in insuring a particular activity or even selling insurance to the right candidate.

Also, with insurance comes the issue of fraud and fraudulent claims. We do a lot of work in analysing claims to segregate the genuine ones from the fraudulent ones; so a lot of money is saved there as well.

Who are your clients in the insurance space?

We already have a deal with ICICI Prudential (2003). We are also in talks with public sector units such as LIC and other private sector units.