Offshore services to power Congruent

Congruent Solutions Pvt Ltd, a Chennai-based IT products and services firm, sees offshore services for 401(k) Administration Processes (retirement savings scheme in US) as its engine of growth in the near future.

"Business support services for 401 (k) plan, a popular retirement savings scheme in the US funded by employee contributions and matching contributions from the employer, are expected to contribute about 40 per cent to the company's total revenue in the next 2-3 years. For this fiscal, these services would account for 15-20 per cent of the revenue," co-founder and president of Congruent Bala J Raman told Business Standard.

Retirement market in the US involved four segments "� insurance companies, third party administrators (TPAs), customer organisations and employees of customer organisations.

In the 401 (k) plan, various administrative functions like record keeping and technical compliance services need to be performed typically by the customer service centres and the TPAs consider such services as an area to be outsourced, thereby freeing the experienced staff to handle consultative tasks.

Congruent had demonstrated that these services could he handled by the US and offshoring of such administration processes would help TPAs reduce expenses, increase profitability and handle tight plan processing deadlines, Raman said.

At present, the company handles offshore services for three clients in the US and has been talking to a number of TPAs. As the next step in its growth strategy, it is planning to target plan providers and larger insurance companies in the US in a couple of years.

"We are in discussions with a retirement planning arm of Fortune 500 company to offer business support services for 401 (k) administration process and hope to finalise the deal in the next 3-6 months. This will be a big fillip to our growth," he added.

Congruent, which is in the sub-$5 million revenue category, hopes to end this year with a growth rate of 80 per cent. It also expects to achieve a growth rate of 60 per cent in the coming years.

Asked about the key differentiating factors between Congruent and other firms, he said the company had gathered significant experience in building custom applications for the benefits administration market.

It has developed online platforms for collaboration between plan sponsors, administrators, providers and plan participants.

It has also built voice interfaces for benefits administration platforms. "We are focusing on providing end-to-end services for 401 (k) administration processes," he said. "Our advisors have rich experience in implementing benefits administration systems in leading financial institutions and insurance companies in the US," he added. The company has two offices in the US.