The HCL technologies has bagged a huge outsourcing contract from Citibank, India’s fourth largest IT services. The value of the contract would be around $200 million. The Business Process Outsourcing arm of the HCL technologies will manage back end processes for the financial products, loans and customer services. By August 2012, the new project is expected to start. The HCL technologies bagged a contract worth $250 million from the SWiss banking major, Union Bank of Switzerland and hired 1000 employees to set up an offshore delivery center for UBS in Bangalore to carry out tgheir back end processes.
The HCL will hire 800 new employees once the citibank project goes live. The three deals suggested that the HCLis betting high on banking Financial Service and Insurance sector. Base on the report, the sector is estimated to grow by 10-15% globally and the HCL will be hopeful to have a bigger share of the pie. The citibank work on the pure outsourcing model and already have tie up with TCS to provide back office support services.
The BFSI sector accounts for the major share of the overall revenue earned by the Information Technology services company in India. 43.3% of the overall revenue of TCS and 35.3%of the Infosys revenue is from the BFSI deals. The BFSI contributed less than 25% to the overall revenue generated. But, with the new deals with major banking groups in its kitty, it seems like BFSI sector will be the major contributor to the overall revenue generated by the HCL for the current financial year.
The BFSI sector accounts for the maximum outsourcing deals signed in the March quarter based on the Everest Group report.
These are the main reasons for the increased outsourcing activity in BFSI sector: weak economy, complex regulatory norms, buyers focus on reducing cost, degree of value generated by outsourcing non-core process and need for IT-BPO integrated environment.
The US and UK stated in the report that it will continue as biggest markets for the BFSI outsourcing industry and it will see increasing number of the deals signed from emerging economies like the Latin American regions and Asia Pacific. There is an increasing trend among most banks to outsource non core process such as IT support and the data management to third party IT services providers and do other high value works in their in-house centers. By moving up the value chain to provide analytical services and regulatory and compliance works for the financial service sector, the Business Process Outsourcing companies are alls et to exploit the new trend.
REFERENCE:
http://www.bpoindia.org/news/hcl-closes-bpo-deal-with-citibank-worth-200-million/
