Infosys Technologies has started offering Indian cooperative banks a cloud version of its core banking product Finacle, dabbling into what some experts said is a R2,000 crore market. Core banking on the cloud ? an on-demand paradigm where the software product is consumed from the Internet rather than on-premise, could save a cooperative bank about R20-25 lakh in capex. Starting this quarter, Infosys is going to market with a ‘pay per branch’ subscription model for the solution it calls Finacle Lite. The subscription bundles access to physical infrastructure, database and operating system as well as the Finacle application and services, senior VP and global head of Finacle Haragopal Mangipudi said.
Finacle is one of the rare success stories in Indian software products globally. The product runs 47,000 branches worldwide and raked in $295 million in FY 11, growing 42% over the previous year. India constitutes about $60 million of the pie, sources said. About 30 banks run on Finacle in India.
The firm says that co-operative banks, most of which use either in-house or localised solutions, is a natural growth area. According to various estimates, there are about 2,000 co-operative banks that could switch over to a cloud-based core banking offering as these organisations try to bring the unbanked into the banking system and ramp up credit products. ?Finacle Lite is not so much about a light feel of functionality. It is light on the investment required from the bank. The challenge for the smaller banks, besides the investment part, is their ability to run on-premise core banking solution as well as the infrastrcuture,? Mangipudi said. ?With a cloud solution, co-operative banks need not make investments upfront in an on-premise data centre, hire talent to manage IT, or design systems. They also don’t have to worry about hardware obsolescence, upgrades on databases, maintainence of applications or production support,? he added.
Although Finacle Lite would address cooperative and small Indian banks to begin with, the solution could be taken to the credit unions of other countries that function like a cooperative financial institution, the executive noted. The cooperative bank segment in India has seen increased interest from Indian IT companies of late. Infosys is not the first firm to put its core banking solution on the cloud ? TCS, Infrasoft Technologies and Polaris have already started marketing their solutions.
?We have had tremendous success in the initial stages of offering core banking on hosted model. We have also built various partnerships to effectively deliver banking automation on shared services model,? Hanuman Tripathi, group managing director of Infrasoft Technologies said. The firm’s cooperative banking customers include the Pavana Sahakari Bank, Business Co-operative Bank, Shri Mahavir Sahakari Bank, Navi Mumbai Co-operative Bank, and Mahalaxmi Co-operative Bank among others.
?Cloud based solutions will require only 10-15% of the total capex as one time charges for commencing usage of core banking solution. Besides, this model reduces time to implementation in equal measure. Our ball park estimate of monthly charges is in the region of R20,000 per branch per annum,? Tripathi said.