The Hindu Business Line : Infosys mulls launching Finacle as service offering

Infosys Technologies Ltd is evaluating options to launch its universal banking software - Finacle as a service offering, which should help the company expand its market reach further.

The company is looking at both the Application Service Provider (ASP) model and also the Software As A Service (SaaS) platform for launching Finacle as a service offering.

"We are looking at it seriously," said Mr Merwin Fernandes, Vice-President and Business Head, Finacle. "Discussions are on internally and we are evaluating various models to address specific areas. A service offering is a clear stage for us," Mr Fernandes said.

But, he declined to spell out the time frame as to when Infosys will launch Finacle as a service offering.

Further, Mr Fernandes said there was a good demand for banking software as a service offering, especially on the ASP model from smaller banks mainly in the US and from credit unions in Australia. But, in India, the critical mass for such an offering has not emerged yet, he said.

Standardised

Typically, smaller banks, which are willing to give up their unique way of functioning and differentiation, prefer to adopt a standardised model such as an ASP. However, in an emerging scenario, even large banks are willing to run some standardised applications such as regulatory compliance and mortgage origination among others from an ASP, without compromising on their differentiated service offerings, he said.

Royalty revenue

Traditionally vendors such as Infosys and i-flex Solutions have been charging royalty revenues on a per account basis from global clients for their banking software products. However, in India, where royalty revenues are relatively lower, the charges are a combination of both per account and the number of branch licences.

With microfinance emerging as a new frontier, vendors such as i-flex have joined an initiative taken up by ICICI Bank & IBM to address the new segment.

Financial Information Network and Operations Pvt Ltd (FINO) expects to target 300-400 million people who do not have access to basic financial services.

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