TCS wants Bancs in the cloud
A cloud computer banking solution is being trialled in India by Tata Consultancy Services, as a first step in what is ultimately planned to be an international rollout of cloud services to the financial sector.
Girija Pande, chairman of TCS in Asia Pacific, who was in Sydney this week to speak at the Forbes Global CEO Conference said; "We have 80 SMEs in India piloting the cloud model." In addition the company is running a trial banking cloud.
TCS, which is one of the 100 companies owned by Indian giant industrial conglomerate Tata, has become a significant player in the international banking and finance market, particularly following its purchase of the Bancs core banking system from Sydney based software house Financial Network Services, for which it paid US$26 million in 2005.
The company claims that around 40 per cent of its US$6.3 billion in revenues last year came from sales to the banking and finance sector.
While it has sold Bancs to a number of international institutions, according to Pande, "It occurred to us that there are small banks, community banks and city banks that are just one branch. All of them can't afford expensive IT systems so we have put it on the cloud."
He said that 2000 bank branches, operated by seven different credit unions in India were among the organisations currently trialling a cloud based banking solution. Once the company had ironed out kinks in the system, it was keen to launch a cloud based system internationally.
Although TCS refused to speculate when that cloud based banking service might reach Australia, Pande expected there would be an appetite for cloud based services among credit unions in particular.
He was less sure about the value of cloud for large banks. "The scale of large banks is large and you won't be able to put them in the cloud," said Pande.
He said challenges associated with security and privacy might militate against large banks putting their core systems into the cloud. While Australia's banks have looked at cloud computing - CBA in particular - it does seem likely that they will initially develop private internal clouds rather than attempt to offload their core banking systems to a third party cloud provider.
In Australia, while TCS does business with CBA, ANZ and Westpac, it has yet to sell its Bancs core system for any of the four majors' local operations although it has an Australian compliant version of the product and a number of smaller finance customers including Arab Bank in Sydney and The Rock Building Society. (Bancs is also being used by the CBA in Indonesia.)
With CBA signed with SAP for its local core systems revamp and NAB still committed to Oracle's i-Flex only Westpac and ANZ remain as possible big bank candidates for Bancs locally.
ANZ already uses Bancs in its Shanghai Rural Bank affiliate. This is however probably more to do with TCS' growing strength in the Chinese banking sector, rather than an indicator of ANZ's long term global IT strategy. According to Pande Bancs is now being used in four major banks in China and is ranked the number one banking solution for China.
Even so, according to Vish Ayer, the head of TCS in APAC; "China holds a very large potential. We have only probably scratched the surface in banking and finance."
Pande claimed Bancs is also widely used by India's banks.
Although Westpac is a TCS client, it is not a TCS core banking client. Asked whether Westpac had reviewed the system Varun Kapur, general manager for TCS in Australia, said, "My understanding is Westpac is not actively looking at a core banking solution at the moment."
The company however claimed it expected Bancs to be considered by any major bank looking for a new core banking platform.
While banks, financial services companies and insurance firms were key targets for the company internationally, Mr Kapur singled out the Australian superannuation sector as being particularly ripe for IT investment.
TCS has 4324 people serving the needs of the local market, 1314 of whom are locally based with the remainder located offshore.