TCS sees growth in BFSI space due to increasing tech spend by banks

According to TCS, next generation customer experience, cloud and analytics & insights are areas are areas where the firm is witnessing higher spend from banking clients

Tata Consultancy Services (TCS), India’s largest IT services company, on Tuesday said that the firm is expecting the growth momentum in its Banking, Financial Services and Insurance (BFSI) verticalto continue following increase in tech spending by large global banks. 

After witnessing a sluggish growth for eight consecutive quarters, the BFSI vertical of the company posted a healthy growth of 3.7 per cent in the June quarter on a q-o-q basis. BFSI is the largest business vertical for the Mumbai-headquartered company, accounting for almost 40 per cent of its overall revenues.

"In the recent years, we found that BFSI was not growing as fast as earlier because globally, banks were more focused on compliance and regulatory issues. However, regulatory pressure is moving away now and banks are looking at technology implementation in order to transform their operations," said K Krithivasan, Head of Banking, Financial Services, and Insurance (BFSI) vertical at TCS. 

Most of the US banks had reported sound profits in the first quarter of the current calendar year. According to statistics published by Federal Deposit Insurance Corporation (FDIC), bank profits in the US soared by 28 per cent during the first three months of CY18 to $56 billion. The banks are now looking at spending higher in technology implementation in order to transform their operations. 

"There is a shift from compliance mindset to growth mindset now, which is the key growth driver," Krithivasan said. Banks focusing on leveraging technology for growth and transformation are engaging with TCS because of its investment in cloud, artificial intelligence and automation, he added. 

According to the company, next-generation customer experience, cloud, analytics & insights, artificial intelligence, machine learning and data programme are some of the areas in which the company is witnessing higher spend from banking clients.

TCS also said that the company would absorb fewer employees from clients in BFSI in the US as it builds scale and capability to execute projects in this space. 

"While we have in-sourced a few thousand employees from Transamerica and other companies as part of our platform deals, we will not see such a level of in-sourcing in future deals," he said, adding that the company is building up its scale and capability. 

The company had earlier absorbed around 2,200 employees from Transamerica, 1,000 employees from Lloyds insurance division and 1,800 from M&G Prudential as part of those contracts.  

On the reskilling front, Ravi Vishwanathan, chief marketing officer of the company said that around 270,000 personnel of its global employee base of around 400,000 have already been digitally trained. He also said that the company would hire around 20,000 freshers this year, almost the same as last year, through campus recruitment programme.