I recently attended the TCS Business 4.0 conference in Boston to understand TCS’ latest developments in the BFSI sector. Here are the key takeaways.

BFSI represented 32.5% of TCS’ Q2 2018 revenues and generated $7.7bn in revenue over the latest twelve months. TCS reports 20% of BFSI revenues are derived from its digital offerings, with BFSI clients adopting digital technologies and services at a pace which is expected to accelerate over the next few years. TCS surveys of its own BFSI client base indicate 44% of banks intend to implement open banking capabilities in the next three years and 75% of banks expect to operationalize some form of blockchain platform by 2020.

Digital demand shift from B2C to B2B use cases

Over the last 12 months, TCS has seen a shift in BFSI client demand for digital services from B2C use cases (including digitalization of the customer experience and expanding the range/functionality of omni-channel engagement) to B2B use cases, which include:

• Capital markets adoption of digital technologies to support wealth advisors and investment managers
• Exchanges facilitating experimentation with new security types at lower cost, or B2B data management across independent organizations and compliance
• Blockchain experiments, which are finding highest adoption among large-scale ecosystems including exchanges and tier one global banks, which have communities with very high numbers of participants and transactions.

TCS is delivering these services using its Machine First Delivery Management (MFDM) network. Increased automation through MFDM helps to increase delivery predictability by reducing error rates, but requires the rearchitecting of the workforce structure, skills, and methods to increase delivery collaboration and agility across TCS’ Global Network Delivery Management (GNDM).

Workforce training has been critical to TCS delivering an agile skilled workforce. It has trained 235k employees on agile work methodologies, 67k agile practitioners, 11k agile certified, and 380 Ninja coaches. This training has resulted in 1.5k agile engagements, 80+ transformational programs, and ~100 large-scale agile adopter clients. TCS claims 20% productivity and 100% process velocity increases where it deploys agile techniques.

A value stream approach to innovation

To support client process innovation, TCS has shifted its operations delivery approach to a value stream orientation. This engages with LOB and operations executives to simplify processes and undertake “risky” processing innovation in the context of business value streams, not operations delivery processes.

Businesses have always competed on price, quality, and speed. Today, digital processing increases the value of speed, making it the prime differentiating characteristic in financial services. This requires transforming operations by failing fast and adopting new IP and procedures as needed. In the past year, banks have changed their buying requirements in the following ways:

• From lowering operational risk to mitigating operational risk required to meet business goals
• From single-site location of operational resources for scale economies to multi-location, coordinated delivery to achieve scale economies
• From development methodology to enterprise transformation methodology
• From tactical adoption to operations model transformation
• From humans executing tasks with machine support to humans coordinating machine execution.

Case studies

TCS illustrated the benefits of agile transformation with a case study of a large European bank for whom it provided cloud DevOps, unified collaboration, and multi-shoring services across 65% of the bank’s platform landscape. It involved ~160 agile teams, and 1.5k associates. The key benefits included:

• Time-to-market reduction: 30%
• Cycle time reduction: 80%
• Faster deliver: 30%.

Another BFSI case study focused on business disruption. A major global asset manager (that did not have a personal advisory business) wanted to enter the wealth advisory business with a focus on the mass affluent marketplace. Key differentiators in wealth advisory are quality of advice and price. The challenge was to create a scale business while maintaining a focus on individual customers. The scope of engagement covered two key business activities with robots and advisors working together:

• Customer acquisition:
  • Robot: customer data acquisition, needs analysis, and portfolio construction
  • Advisor: disclosures, modifications, and strategy approval
• Customer sustenance:
  • Robot: periodic reviews, event-triggered changes, rebalancing, and cash-out activities
  • Advisor: cash-in events, life events, and strategy/portfolio changes.

The wealth advisory business has been successful, as evidenced by:

• Growing the mass affluent business to $112bn AUM by mid-2018
• Service fee price points of >= 0.3% of AUM, with satisfactory business profitability
• Hybrid human/robot advisory model working effectively.