Like JP Morgan, Bank of America, and Citigroup, numerous big global banks have increased their spending in India’s cutting-edge technology. Previously using mainly outsourced tech services, banks now realize the long-term need and benefit of building their in-house tech team. As per JP Morgan’s annual report 2019, they have increased their tech spend by 4% despite the pandemic. They are allocating 50% of the spend to new capabilities within banking technology.
The employee numbers for India tech centers are significantly substantial, with JP Morgan and HSBC taking the lead with over 35,000 employees in India. Right behind them are banks like Bank of America, Wells Fargo, and Standard Chartered with 15,000 to 20,000 employees.
Tech centers have been around for a while where back-office work, verifications, checking, processing, and basic IT work was concerned. However, with technological development, India is creating cutting-edge tech platforms like products for analytics and risk management and developing products for end-users like customer apps, which allows them a pivotal role in the growth of global banks. A great example is Goldman Sachs’ Bengaluru Centre, which has been at the ‘heart of tech development’ for their digital bank Marcus.
40% of our global tech organization sits in India. We are building new apps, new processes. We are incurring, to simplify operations, bring more end-to-end efficiency. COVID also made us realize this improves recovery capabilities. If work is too distributed, it becomes complex. – said Arindam Banerrji, MD, Wells Fargo India, and the Philippines
Many banks choose to outsource their tech talent from companies like Accenture, TCS, Cognizant, Infosys, and Wipro due to cost-effectiveness. However, over time, and primarily through the pandemic period, the value of insourcing their tech staff has been realized and acted upon. While outsourcing is cost-effective, it does lead to a ‘fragmentation of systems’ and the compromised “level of agility” results in slower responses to the changing market. Picking up on this, Deutsche Bank has proceeded to become one of the most “aggressive insourcers”. About 50% of their tech staff is currently insourced, and they hope to raise this to 80%.
We decided 6-7 years ago that we are going to go big into India, put full end-to-end work here. Today, we have many senior global roles in India. We have 3,500 technologists, about 30% of the internal tech workforce. That number is increasing and could become 45-50%.– said Ash Malik, Head of India Technology Centre, Deutsche Bank
Tech initiatives such as app building and developing Robotic Process Automation (RPA) systems have focused on global banks. The pandemic has augmented the need for remote working options, and this is where technology comes into play. Wells Fargo’s India Centre has played a central role in acting out its major tech initiatives. They have worked on app building from conceptualizing, developing, and testing to managing it and extensive analytics to build appropriate products. HSBC’s India Centre created a useful NPS (Net Promoter Score) to measure customer experience changes during process automation. DBS Bank’s Hyderabad Centre has built its own digibank app, which is now used globally.
Robotic Process Automation plays an important role today. ANZ’s India Centre and The Royal Bank of Scotland Centre have been amongst global banks to take on RPA. ANZ was able to bring down their manual processes by 85%, which significantly brought down their execution of customer processes from 5 days to 24 hours with reduced errors. On the other hand, The Royal Bank of Scotland used RPA to automate all their backend processes and push all their staff to the front office, which positively impacted their customer service.
World’s biggest banks and the India IT industry are likely to make the most of the ongoing exchange. While the banks use either insourced tech hires or outsourced tech services to gain from the innovations, the India IT industry also benefits from the increase in tech spending from the global banks. With technology constantly evolving to produce the next easiest and most effective solution, banks will invariably be looking towards India’s cutting-edge technology.