Despite a decline in global BFS (Banking and Financial Services) revenues and headcount, India continues to be a favoured destination for BFS multinationals to set up their technology centres.

Over the last three decades, 55 BFS MNCs have set up 113 technology centres or GICs (Global In-house Centres) in the country, whose current market size of $5 billion is expected to grow to $8 billion by 2020.

Increasing investments in technology and a decline in outsourcing to IT service providers are enabling the growth of BFS technology centres in India, says the latest report titled ‘BFS MNCs Technology Centre Landscape in India’ from management consulting firm, Zinnov.

“The overall market size for technology centres of BFS MNCs in India is expected to grow from $18.5 billion in 2017 to $25.7 billion in 2020, at a CAGR of 11.6 per cent,” said Anand Subramaniam, Delivery Head, GAP – GIC Accelerator Platform, Zinnov.

Early entrants

Elaborating, he said, “Of the $18.5-billion, $5 billion is the current addressed market size, which constitutes the overall cost of running the GICs.

“However, there is a huge untapped market opportunity of $6.8 billion for existing GICs to scale up and take in more work and a new market opportunity of $6.7 billion for others BFS multinationals to set up new GICs in the country.”

The early entrants to India include ANZ, American Express, Standard Chartered, Deutsche Bank and what brought them to India was the cost arbitrage, large employable talent pool and conducive Government policies.

There was a brief period of panic when Citibank Technology Centre sold out to Wipro for $127 million in 2006, UBS sold its India GIC to Cognizant and Citicorp’s stake in I-Flex was acquired by Oracle.

Talent base

However, the GIC growth story continued in India when the GICs of troubled MNCs such as Lehman Brothers was acquired by Nomura.

Further, the return of Citi Bank and UBS to India to set up GICs highlighted the inherent potential of the India Market. The installed technology talent base of over 1,47,300 employees in these technology centres has grown at a CAGR of over 10 per cent over the last five years and is expected to grow at the same pace to employ more than 2,00,000 technologists by 2020.

Bengaluru followed by Mumbai account for 47 per cent of the technology talent in these centres. Hyderabad, Chennai, NCR and Pune are the other locations where the BFS GICs are located.

comment COMMENT NOW