Tech firm Red Hat bets on telecom, BFSI in India, eyes smaller cities

To expand into smaller cities, leverage upon govt's financial inclusion push

Open source software provider Red Hat sees huge opportunities in the banking, financial services, and insurance (BFSI) as well as telecom sectors in India, with the government’s push for financial inclusion through providing affordable digital banking solutions. The company is also looking to expand its services to tier-II and-III cities in the country.

Most core banking systems across the globe run on Red Hat architecture in some form or the other, including Indian platforms like Infosys’ Finacle, said Benjamin Henshall, country manager (India and South Asia) and Director (Sales and Financial Services) of APAC, at Red Hat. After opening its first office in India in 2000, Red Hat has now expanded to five offices in the country.

Red Hat, which witnessed strong growth in the APAC region (20 per cent bookings according to Q2 results), has a sizeable base in India that includes research and development centers in Bengaluru and Pune. The company has lately been discussing its entry into non-metro markets across the country, through their presence across sectors like BFSI and telecommunications.

“Telecommunications, government, and banking and finance, are the three biggest sectors for us in India. Being at the forefront of digital transformation, they are very critical for us to focus on,” said Henshall, who calls Red Hat an ‘infrastructure cloud-native, open source plumbing’ company.

Red Hat has a presence across core banking systems, solutions for digital banking, and open banking systems, among others.

“Most core banking vendors out there like SAP, Silverlake, Hitachi and even Finacle run on Red Hat, but it’s about how much of it runs on Red Hat’s architecture. This is because Red Hat has a multiplicity of different components that a vendor like Finacle can certify on,” he added.

The company is also focusing on verticals such as manufacturing, and automotive-ancillary industries.

Henshall notes that with a population of 1.3 billion and a government that is moving towards banking and financial inclusion, there is an increasing need to provide low-cost, highly-scalable and usable banking services.

This scale of service needs a different type of architecture and software development. Red Hat technology is also being used in the government’s unique ID project Aadhaar.

“In India, we are observing an opportunity to help the banks continue with their transformation journey to become digital-native, programmable banks by providing engaging customer experiences through products and services,” said Henshall.

Traditional software architecture is not well-suited for this type of opportunity that Indian banks are trying to tap into. This is because they are too costly, monolithic and not that interoperable, which is really around open banking and open APIs (application program interface).

“Open source and Red Hat are in a really good position to help support these things, to put in next generation architecture designed for the cloud, and to apply agile software development practices known as DevOps to facilitate rapid prototyping as well as delivery of these products/services at a low cost,” he added.