Infosys, IBM to develop banking system for Williams & Glyn's

Multi-year contract may fetch over $300 million in revenues for Infosys

Infosys, India’s second largest IT services company is understood to have bagged a large IT outsourcing contract from Royal Bank of Scotland (RBS) to develop the banking system for Williams & Glyn's Bank. The multi-year contract is expected to fetch the company revenues of over $300 million, sources in the know said.

RBS had earlier agreed to divest 49% stake in Williams & Glyn’s to a private equity consortium led by US buy-out firm Corsair Capital for about £800 million, a move which is aimed at using the brand for creating a separate banking business. The new bank will have 314 branches primarily located in the north-west of England.

According to sources, ahead of separating Williams & Glyn’s as a separate bank, RBS has embarked on a technology modernization project for the former which could entail an investment of over £300 million (around $485 million). Apart from Infosys, IT major IBM is also understood to have been selected for the project as a part of which the IT vendors will have to build new banking system for Williams & Glyn’s which will be based on RBS’s existing core banking platform. A major portion of the contract would be handled by Infosys, industry sources added.

Infosys declined to comment on the deal. “We do not comment on client engagements,” a spokesperson of the Bangalore-based company replied to an email query. IBM did not revert to an email query.

Edinburgh-headquartered RBS already has a strong technology outsourcing engagement with Infosys. RBS is said to be one of the top 10 clients of Infosys.

According to industry experts, there has been a spurt of deals in the banking, financial and insurance (BFSI) space primarily driven by the compliance related requirements as well as merger and acquisitions. In the last quarter, Indian IT services companies like Infosys, Wipro and HCL Technologies have managed to bag significant number of deals from banks and financial organization in large markets like North America and Europe.

“Williams & Glyn’s contract is a testimony of the fact that BFSI will continue to be the flag bearer for the growth of the export-driven IT services players who derive a third of their revenues from this vertical,” said a market analyst pleading anonymity.

In the quarter ended June 30, 2013, BFSI segment accounted for close to 34% Infosys’s total revenues with a sequential growth of around two%. Following its acquisition of Switzerland-headquartered consulting company Lodestone in October last year, Infosys has strengthened its consulting and systems integration capabilities in continental Europe.