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Infosys boss urges banks to be more agile via innovation and technology.

Summary: Banks have to become more agile and flexible to keep up the growth momentum even as the global banking industry continues to face profound challenges amid the unstable macro-economic scenario, founder and executive chairman of IT giant Infosys said on Wednesday.

Banks have to become more agile and flexible to keep up the growth momentum even as the global banking industry continues to face profound challenges amid the unstable macro-economic scenario, founder and executive chairman of IT giant Infosys said on Wednesday.

"Removing unnecessary complexities is vital for the banking industry, which has seen its profitability shrinking significantly amid the global meltdown," said N.R. Narayana Murthy, who has come back from retirement in June to lead Infosys again with a mandate to revive the sagging fortunes of the IT major.

In 2012-13, Infosys recorded a slower growth of 6.6 per cent vis-a-vis its peers Tata Consultancy System and HCL technology, both posting growth rates above 15 per cent.

Addressing a Press conference to announce the global launch of Finacle 11E, an advanced universal banking solution that simplifies banking transformation, Murthy said technology is the next big thing to accelerate banking sector growth. "A paradigm shift is inevitable though innovation and technology," he said.

A case in point is the mobile banking solutions which are on the fast track of growth and transform the way people bank, Murthy pointed out.

He said mobile payments performed via a device such as a smartphone would reach $2 trillion mark by 2017.

The latest comprehensive market study by Portio Research said in the next two years many more consumers worldwide will be engaging in making mobile payments.

At the end of 2012, there were 480 million mobile payment users worldwide -- this number is expected to cross the one billion users mark by the end of 2015. Moreover, the figure is expected to continue increasing -- eventually reaching nearly 1.5 billion users by the end of 2017, according to the research.

Worldwide, the mobile payment market is set to grow to reach $410 billion this year, and then volumes are expected to grow at an impressive CAGR of 59 per cent until 2017-- breaching the $1 trillion mark by end of 2015, and the $2 trillion mark by the end of 2017.

Murthy said the latest Finacle version's componentised approach helps banks of all sizes to rapidly modernise their operations, in a phased manner while minimising risk. Its enterprise-class components are expected to enhance the efficiency of a bank's operations, while improving customer experience across all channels.

"As banks aim to reinvent their business and navigate the current challenges in the macro-economic environment, Finacle 11E promises a simplified approach to banking transformation," said Murthy.

Haragopal M, global head, Finacle, Infosys, said complexity of business operations and need for technology modernisation is among the biggest hurdles to accelerate growth today. "Leveraging the componentised nature of Finacle 11E, banks can choose to deploy a solution in phases based on business priorities. This ensures simplified transformation journey and faster realisation of modernisation benefits."

Ali Sajwani, chief information officer, Emirates NBD, said Finacle Core Banking Solution has been powering the Dubai-based bank's operations since 2009.

"As a long term partner, Finacle has helped us grow both organically and inorganically. It is encouraging to see Infosys constantly evolving their solution to meet growing needs of banks for simplification and easy modernisation. We are currently rolling out their new liquidity management solution to offer tailor-made cash management products to our corporate and SME clients," said Sajwani.

Robert Hunt, senior research director, CEB TowerGroup, said large banks are reluctant to undertake core modernisation projects due to the risks and complexity of the effort.

"By componentising their products, core vendors are providing banks with the flexibility needed to develop phased implementation plans that reduce this risk. Moreover, componentisation allows banks to prioritise their efforts, improving the business case for core modernization by focusing on functions that provide the greatest short term benefits."

issacjohn@khaleejtimes.com

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Publication:Khaleej Times (Dubai, United Arab Emirates)
Date:Sep 19, 2013
Words:680
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