© infosys technologies limited 2004-2005 financial services ashok vemuri vice president & head...

© Infosys Technologies Limited 2004-2005

Financial ServicesFinancial ServicesAshok Vemuri

Vice President & Head – Banking and Capital Markets

Ashok VemuriVice President & Head – Banking and Capital Markets

© Infosys Technologies Limited 2004-2005 Analyst Meet 2004 | New Game. New Rules.

Safe HarborSafe Harbor

Slide 2

Certain statements made in this Analyst Meet concerning our future growth prospects are forward-looking statements, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2004 and quarterly report on Form 6-K for the quarter ended June 30, 2004. These filings are available at www.sec.gov. Infosys may, from time to time, make additional written and oral forward- looking statements, including statements contained in the company's filings with the Securities and Exchange Commission and our reports to shareholders. The company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the company.


AgendaAgenda

» Introduction to the Financial Services Practice

» Market overview and client imperatives

» Financial Services Strategy

» Industry Expertise

» Risk management

» Solutions and Alliances

» Integrated Outsourcing

» Benefits of our new Strategy

» Q&A

Slide 3


Banking and Capital Markets

The financial services industry is the largest end-user of Infosys’ servicesThe financial services industry is the largest end-user of Infosys’ services

Insurance & Healthcare

ASIA-PACIFICASIA-PACIFICEUROPEEUROPE

• Financial Services is the largest contributor to Infosys’ revenues, accounting for 34% of total revenues

• 74% of Financial Services revenues comes from North America• The Banking Business Unit develops and markets the Finacle® suite of

banking products and solutions

NORTH AMERICANORTH AMERICA

Europe Financial Services Practice

Asia-Pacific Financial Services Practice

Global AccountsGlobal Accounts

Banking Business Unit (Finacle Banking products)Banking Business Unit (Finacle Banking products)

Slide 4


It contributes to over a third of company revenues and has been growing at a CAGR of 39 percentIt contributes to over a third of company revenues and has been growing at a CAGR of 39 percent

REVENUE BY INDUSTRY VERTICAL (Q1 05)

283

416

200

389

FY 02

FINANCIAL SERVICE REVENUE ($ M)

FY 03 FY 04

34.0%

15.0%

17.9%

11.4%

21.7%

Manufacturing

Financial Services

Telecom

Others

Retail

CAGR=39%

Number of active clients

Number of large clients*

$ 30 m+

$ 5 m+

Practice Strength

: 127

: 5

: 13

: 8,500

Consulting & Package Implementation

ADM

Testing and Re-engg.

Others

: 12.8%

: 55.5%: 11.8%: 19.9%

KEY METRICS REVENUE PROFILE

LTM Q1 05

Slide 5


We service the complete spectrum of the financial services industry…

We service the complete spectrum of the financial services industry…

TreasuryTreasury

Retail Banking & Cards

Retail Banking & Cards

Transaction BankingTransaction Banking

Corporate & CreditCorporate & Credit

Private BankingPrivate Banking

Investment ManagementInvestment Management

CustodyCustody

Depository & Exchanges

Depository & Exchanges

Diversified Financial

BrokerageBrokerage

InsuranceBanking Capital Markets

Advisory ServicesAdvisory Services

Leasing & FinanceLeasing & Finance

Benefits Administration

Benefits Administration

Trust ServicesTrust Services

Travel Related Services

Travel Related Services

Specialty FinanceSpecialty Finance Health CareHealth Care

Life InsuranceLife Insurance

Property & CasualtyProperty & Casualty

Insurance BrokerageInsurance Brokerage

Re-InsuranceRe-Insurance

Slide 6


CAPABILITIESCAPABILITIESCAPABILITIESCAPABILITIES

• Global Sourcing Strategy• Portfolio Rationalization• Benchmarking & Best Practices

STRATEGIC PLANNING

BUSINESS TRANSFORMATION

OPERATIONAL EFFICIENCY

RISK MANAGEMENT &

COMPLIANCE

CUSTOMER & REVENUE

MANAGEMENT

• Org-wide BPR• Post-Merger Integration• Time-To-Market Reduction

• Straight Through Processing• Claims Process Automation

(Paperless office)• Process & System Optimization • CMM & Six-Sigma Consulting

• Anti-Money Laundering, HIPAA• Trading Compliance• Basel II• Sarbanes Oxley

• Unified Customer View• Data Management• Pricing Strategy• Client Reporting

ADM & ENHANCEMENT

BUSINESS PROCESS

OUTSOURCING

INFRASTRUCTURE MAINTENANCE

BUSINESS CONSULTING

… through a suite of end-to-end business advisory and execution services… through a suite of end-to-end business advisory and execution services

SERVICESSERVICESSERVICESSERVICES

PR

OG

RA

M M

AN

AG

EM

EN

TP

RO

GR

AM

MA

NA

GE

ME

NT

Slide 7


Market Overview and Client ImperativesMarket Overview and Client Imperatives


154145

136

114

129123

WORLDWIDE FINANCIAL SERVICES IT SERVICES SPENDING ($ Billion)

The worldwide financial services industry spends about $129 billion annually on IT servicesThe worldwide financial services industry spends about $129 billion annually on IT services

Source – Gartner

FY 02 FY 04 FY 06FY 03 FY 05 FY 07

CAGR6.3%

Technology is one of the top 5 business issues for financial services CEOs

The financial services industry represents the largest market for IT Services spending worldwide

Financial institutions have been at the forefront of global sourcing both in technology as well as in operations

We are now seeing growth in all segments in this industry, due to the recovery in the US and world economy

Several other drivers are also contributing to this growth:

» The quest for competitive advantage» M&A related IT integration» Regulatory mandates (e.g. Patriot Act,

AML, HIPAA, Basel II, etc.)

The era of buying technical expertise is on its way out and that of buying business-IT expertise is emerging

Technology is one of the top 5 business issues for financial services CEOs

The financial services industry represents the largest market for IT Services spending worldwide

Financial institutions have been at the forefront of global sourcing both in technology as well as in operations

We are now seeing growth in all segments in this industry, due to the recovery in the US and world economy

Several other drivers are also contributing to this growth:

» The quest for competitive advantage» M&A related IT integration» Regulatory mandates (e.g. Patriot Act,

AML, HIPAA, Basel II, etc.)

The era of buying technical expertise is on its way out and that of buying business-IT expertise is emerging

Financial Services IT Services – Financial Services IT Services – Key FactsKey Facts

Financial Services IT Services – Financial Services IT Services – Key FactsKey Facts

Slide 9


Certain mega trends are driving clients strategies and

expectations from service providers - THE NEW GAME Certain mega trends are driving clients strategies and

expectations from service providers - THE NEW GAME

Improve customer management – increase cross-sell and reduce churn

Increased regulatory oversight – focus on risk management & compliance

Global Sourcing for competitive advantage

Growing global competition and entry of non-traditional competitors

Increased complexity and sophistication of financial products and services

Importance of scale leading to industry consolidation through M&As

Increased use of technology to deliver products and services

Cost reduction though operational improvement

Improve customer management – increase cross-sell and reduce churn

Increased regulatory oversight – focus on risk management & compliance

Global Sourcing for competitive advantage

Growing global competition and entry of non-traditional competitors

Increased complexity and sophistication of financial products and services

Importance of scale leading to industry consolidation through M&As

Increased use of technology to deliver products and services

Cost reduction though operational improvement

FINANCIAL SERVICES MEGATRENDSFINANCIAL SERVICES MEGATRENDS CLIENT EXPECTATIONSCLIENT EXPECTATIONS

Global sourcing and delivery capability critical to IT services purchase

– Deep knowledge, not just familiarity, on their industry vertical and sub-vertical

– Familiarity with market actualities

– Pure low cost strategy by itself is inadequate

Expectation of partner size and scale

– Risk Management

– Ability to scale and rapidly

– Potential for strategic partnerships

Expectation of providing an integrated operations and technology offering

Ability to provide industry-focused solutions rather than plain vanilla services

Global sourcing and delivery capability critical to IT services purchase


– Familiarity with market actualities

– Pure low cost strategy by itself is inadequate

Expectation of partner size and scale

– Risk Management

– Ability to scale and rapidly


Expectation of providing an integrated operations and technology offering

Ability to provide industry-focused solutions rather than plain vanilla services

Slide 10


Infosys Strategy to meet Client Expectations

Infosys Strategy to meet Client Expectations


Our strategic response is driven by client imperativesOur strategic response is driven by client imperatives

Increase focus on building domain and process skills

Achieve partner-of-choice status through process innovation to provide low risk and high value solutions and services

Develop industry-focused services and business solutions internally or through third party alliances

Provide an integrated, end-to-end, outsourcing service

Increase focus on building domain and process skills

Achieve partner-of-choice status through process innovation to provide low risk and high value solutions and services

Develop industry-focused services and business solutions internally or through third party alliances

Provide an integrated, end-to-end, outsourcing service

OUR RESPONSE AND FOCUS 2004OUR RESPONSE AND FOCUS 2004++OUR RESPONSE AND FOCUS 2004OUR RESPONSE AND FOCUS 2004++

Global sourcing critical to IT services purchase


– Pure low cost strategy is inadequate

Importance of partner size and scale

– Risk management

– Ability to scale


Need for an integrated operations and technology offering

Need for industry-focused solutions rather than plain vanilla services

Global sourcing critical to IT services purchase


– Pure low cost strategy is inadequate

Importance of partner size and scale

– Risk management

– Ability to scale


Need for an integrated operations and technology offering

Need for industry-focused solutions rather than plain vanilla services

CLIENT EXPECTATIONSCLIENT EXPECTATIONSCLIENT EXPECTATIONSCLIENT EXPECTATIONS

Slide 12


Increase focus on building subject matter expertise across the organization

Achieve partner-of-choice status through low risk (and high value) proposition

Develop industry-focused services and business solutions internally or through alliances

Provide integrated, end-to-end, outsourcing services





We are investing in our people to build depth and breadth of industry expertise…We are investing in our people to build depth and breadth of industry expertise…

OUR RESPONSE AND FOCUS 2004+OUR RESPONSE AND FOCUS 2004+OUR RESPONSE AND FOCUS 2004+OUR RESPONSE AND FOCUS 2004+ BUILD SUBJECT MATTER EXPERTISE

Emphasis on recruiting business consultants and analysts, both in local markets and India, with structured training programs delivered in-house (banking, securities, insurance)

Aggressive focus on domestic and international certifications (NCFM, Securities Institute UK, GARP, Certified Treasury Professional, LOMA, HIPAA, Actuarial Certification, etc)

Quantify various key assets from existing projects to leverage innovation and enhance capability for new initiatives

BUILD SUBJECT MATTER EXPERTISE

Emphasis on recruiting business consultants and analysts, both in local markets and India, with structured training programs delivered in-house (banking, securities, insurance)

Aggressive focus on domestic and international certifications (NCFM, Securities Institute UK, GARP, Certified Treasury Professional, LOMA, HIPAA, Actuarial Certification, etc)

Quantify various key assets from existing projects to leverage innovation and enhance capability for new initiatives

Slide 13


…and are taking steps to ensure Infosys remains the highest value & lowest risk provider…and are taking steps to ensure Infosys remains the highest value & lowest risk provider









OUR RESPONSE AND FOCUS 2004+OUR RESPONSE AND FOCUS 2004+OUR RESPONSE AND FOCUS 2004+OUR RESPONSE AND FOCUS 2004+ RISK MITIGATION FOR CLIENTS

Leverage multiple world-wide and Indian locations to mitigate geographical concentration risk

Appointment of Chief Risk Officer for key accounts

Disaster Recovery and Business Continuity plan for all accounts

RISK MITIGATION FOR CLIENTS

Leverage multiple world-wide and Indian locations to mitigate geographical concentration risk

Appointment of Chief Risk Officer for key accounts

Disaster Recovery and Business Continuity plan for all accounts

Slide 14


Our response is a solutions-led strategy that will quickly address common business and technology problems for our clients

Our response is a solutions-led strategy that will quickly address common business and technology problems for our clients









OUR RESPONSE AND FOCUS 2004+OUR RESPONSE AND FOCUS 2004+OUR RESPONSE AND FOCUS 2004+OUR RESPONSE AND FOCUS 2004+ DEVELOP INDUSTRY-FOCUSED SOLUTIONS

Solutions comprise process know-how, domain and industry expertise and strong technology competency

Solutions have been identified after extensive client validation (Exceptions Management, AML, Claims Process Automation, etc)

Forged alliances with established and emerging technology vendors focused on this industry

DEVELOP INDUSTRY-FOCUSED SOLUTIONS

Solutions comprise process know-how, domain and industry expertise and strong technology competency

Solutions have been identified after extensive client validation (Exceptions Management, AML, Claims Process Automation, etc)

Forged alliances with established and emerging technology vendors focused on this industry

Slide 15


We are also redefining our established outsourcing model to offer a seamless IT & Operations offering to our clientsWe are also redefining our established outsourcing model to offer a seamless IT & Operations offering to our clients

OUR RESPONSE AND FOCUS 2004+OUR RESPONSE AND FOCUS 2004+OUR RESPONSE AND FOCUS 2004+OUR RESPONSE AND FOCUS 2004+ INTEGRATED OUTSOURCING

Integrate Technology & Operations at the strategic, operational and tactical level using our GDM to ensure long term value

Strategic Level At the Board level to capture value and

provide direction Operational level

• Change Management and Organization changes to facilitate integration

Tactical Level• IT Awareness of Operations• Process Application Clustering• Innovation Management

Integrated service offering with Progeon

INTEGRATED OUTSOURCING

Integrate Technology & Operations at the strategic, operational and tactical level using our GDM to ensure long term value

Strategic Level At the Board level to capture value and

provide direction Operational level

• Change Management and Organization changes to facilitate integration

Tactical Level• IT Awareness of Operations• Process Application Clustering• Innovation Management

Integrated service offering with Progeon









Slide 16


The structure for the next generation company-the new rules of the new game. The structure for the next generation company-the new rules of the new game.

Global Majors

• Next Generation GDM– Seamless delivery– Scalability

• Solution-led Selling

• Deep Industry Knowledge

• Client Engagement & Account Mgmt

• Process Maturity

• Talent Attraction & Retention

Offshore Players Infosys

Weak

Very Strong

Ex

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uti

on

Ab

ilit

yIn

du

str

y C

om

pe

ten

ce Ex

ec

uti

on

Ab

ilit

y

Industry Competence

High

Low

High

Global Majors

Infosys

Offshore Players

“Over the years, [Infosys] has developed the domain expertise to service the financial services community and offers support for such core business responsibilities as asset management, investment banking, brokerage services, risk management and custody and clearing.” –Waters Financial Publication

Slide 17


Thank YouThank You

© infosys technologies limited 2004-2005 financial services ashok vemuri vice president & head...

Documents

financial services industry

financial services revenues

infosys technologies

infosys revenues

new game

new rules

forwardlooking statements

new strategy qa slide