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Infosys Places Big Bets on its Vision for Transforming Financial Services Operations Delivery

At its recent Confluence client and stakeholder event, Infosys outlined its overall business strategy, based on the belief that BPO as it is delivered currently will be replaced by business process as a service (BPaaS) delivered on virtual stacks within a few years. Here I take a quick look at the Infosys vision and its application within financial services.

Infosys described the transition to BPaaS as being organized around three key themes:

  • Pervasive end-user centricity: improved sense and response to customer needs and intentions (Infosys calls this concept ‘zero distance’) and utilizing tools such as virtual reality, chatbot interfaces, and immersive spaces
  • Intelligent systems and infrastructure: systems to enhance workers’ and customers’ capabilities in operational situations, and utilizing tools such as open AI, driverless trucks, and Alphago. Infosys’ new key offering in AI is its just launched MANA platform which will help customers go further to improve operations
  • Extreme efficiency of disintermediation: processes and IT will be restructured to implement IT and AI capabilities to produce greater efficiency in processing. ‘Radical Atoms’ contemplates malleable structures governed by IT. This will allow IT to not just display data for workers to use with machinery, but to direct machinery. Radical Atoms is intended to disintermediate labor directing machinery.

These initiatives do not simply require advanced thinking; they require major investments by Infosys into product development and operations delivery. The scale of investment requires partnering with other vendors in order to establish significant market share in the target processes. In financial services, some of the initiatives include:

  • Reference data utility: Infosys in partnership with DTCC has created an RD utility. DTCC and Infosys developed the offering to expedite onboarding European clients in order to meet new trade reporting requirements in the European Market Infrastructure Regulation (EMIR)
  • Capital markets: In alliance with Calypso, Infosys will offer services for investment management, clearing and collateral, treasury and liquidity, and risk and reporting
  • Launching a utility based on ITRS, a proprietary reconciliation platform used on multiple channels and multiple securities. Using automation, the solution reduces manual operations and increases STP.

These projects require very significant labor commitments to develop the technology. The scale is so large that, in late 2015, Infosys voluntarily ceased hiring SAP staff to avoid creating a drain of staff from SAP. The commitment of managerial time is large as well. Services companies, consultancies and BPO firms typically focus time on client requirements twelve months ahead. However, platform development requires multi-year roadmaps, which have two major risks:

  • Client demand: if the features of a platform do not match the client needs, at the time of engagement, clients will not buy. Mitigating this risk requires close interaction with clients (zero distance in Infosys’ terminology). Working with partners such as DTCC and clients as first buyers mitigates this risk
  • Technical feasibility: finding and managing software developers is challenging, and this must be done at scale.

Infosys is well positioned to take these risks, and has focused its efforts in financial services on high priority processes (i.e. compliance and data management) that consume large expenditures for clients. Delivering robust and relevant offerings after relatively long development timelines cannot always be guaranteed. However, if Infosys does this well, there will certainly be high demand for the resultant services. 

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