Wipro gets serious about financial services segment

Wipro is trying to strengthen its presence in the banking, financial services and insurance segment by increasing its revenue share on par with other leading Indian information technology service companies.

Wipro, based in Bengaluru, has devised a broad strategy to increase the revenue share from the BFSI division from the present 27 per cent to about 40 per cent in the next few quarters.

It has also set a goal to create its first mega customer in BFSI, with a revenue of $500 million per annum, in the next three years.

"Though the growth of our BFSI vertical is comparable and even sometimes better than the competition, the overall size of the vertical is smaller. Hence, while the quarterly growth is not a challenge for us, we have set a bigger goal to expand our wallet share to take it anywhere in the range of 35-40 per cent," said Soumitro Ghosh, group vice president and global head, financial services.

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Wipro says its strategy is to focus on six different areas and this has begun to yield dividends. In 2009-10, the company added about 15 major clients in BFSI.

Five were added in the quarter ended March 31, 2011. Other than the new client wins, the company is working on a strategy to mine the existing accounts better.

"We are working on the plan to make one of our accounts in BFSI space to become a $500 million (per annum) revenue generating customer in the next three years," Ghosh added.

Earlier lags

BFSI contributed about $1.3 billion to Wipro's IT services kitty in 2010-11, about 27 per cent of overall IT services revenues.

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India's largest IT services exporter, Tata Consultancy Services, derives close 44.3 per cent of revenue from BFSI. Cognizant gets 42.3 per cent.

Cognizant, though not an Indian company in the true sense, is expected to overtake Wipro on revenue in the quarter ending June 30.

Though Infosys derives about 36 per cent of its revenues from BFSI, it is considered a dominant force in this segment, with marquee clients like Bank of America, Goldman Sachs and American Express.

Ghosh says Wipro had not been able to position itself as an aggressive player in BFSI as it failed to tap the last big opportunity in the Y2K space.

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Most other IT service companies managed to develop a deep-rooted relationship with banking and financial services firms by partnering them to address this challenge.

"We are not present in some of the marquee US banks. The reason for that we missed the Y2K bus. Because of that, the BFSI customers who were pioneers in outsourcing experimented with many service providers to face up to the Y2K challenge. So, when we entered the market (BFSI segment) in 2002-03, the competitors had a sort of unfair advantage over us because of the incumbency," said Ghosh.

Wipro is now trying to introduce customised mobility and analytics solutions, to address the changing needs of BFSI customers in the post-downturn phase.

It also wants to play a major role in the regulatory and compliance space, by working with banks and financial institutions who want to replace their legacy system with package offerings.

Industry experts feel Wipro will take some more time till it catches up with competitors in terms of winning large deals in BFSI.