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| NIIT Tech to offer banking solutions to Tier-II banks |
| Kirtika Suneja / New Delhi May 20, 2009, 00:58 IST |
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Sees huge potential as there are over 1,700 urban co-operative banks.
New Delhi-based NIIT Technologies has forayed into the Tier-II banking space by offering its core banking solution (CBS) to urban co-operative banks and commercial banks.
“After big banks, it is now the turn of tier-II banks to move from Total Branch Automation (TBA) to CBS. However, the CBS, that catered to the Tier-I players, is probably too complex and large for implementation in second-tier banks. Hence, they are on the lookout for second-tier CBS Solutions, catered by IT players like us,” said Arun Pingaley, vice-president, banking, NIIT Technologies.
Kangra Central Cooperative Bank, the Tamil Nadu State Apex Cooperative Bank and Ahmednagar District Central Cooperative Bank are the ones that have recently either implemented a new Tier-II CBS or are in the process of selecting vendors. NIIT Tech is working with some of them and will further tie up with hardware vendors and system integrators like IBM, Dell and HP to set up a system for such small banks.
“This new initiative will not require us to set up new offices until there are three-four branches of a bank in one place,” said Pingaley.
He says that though the margin differential is not much between small and big banks, the average deal size from a Tier-II bank is around $250,000 (Rs 1.25 crore).
The company has over 600 technical resources and 50 functional consultants in the Banking Financial Services (BFS) practice and is optimistic that the headcount in this vertical will increase.
Also, the company gets around 42 per cent of its revenues from this segment at present.
However, the company maintains that the scope to grow in the Tier-II banking space is immense with the country having more than 1,700 urban cooperative banks and more than 80 commercial banks.
Moreover, the company feels Tier 1 players would rather not implement their selected Tier 1 CBS in the next 2,000 or the smaller branches, due to cost and complexity reasons.
Hence, even these larger banks are now looking at Tier-II vendors to address their CBS needs for the remaining branches, post the completion of the top 500 or 1000 branches.
UCO Bank, Central Bank of India and Andhra Bank have recently implemented tier II CBS and NIIT has done the implementation for some of these.
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