US-headquartered Fidelity National Information Services, Inc (FIS) is banking on India's progressive financial sector to make further inroads into the country with its technology offerings, a top executive told TechCircle.
Founded 51 years ago, FIS claims to be the world's largest provider of financial technology solutions. It offers software, services, consulting and outsourcing solutions focused on retail and institutional banking, payments and transaction processing, among other services.
Last month, FIS agreed to buy payment processor Worldpay for about $35 billion in the biggest deal to date in the payments industry. FIS has also set its sights on the booming segment in India, where it has an innovation lab in Bengaluru and marketing and sales offices in Mumbai.
FIS has had a presence in the country for more than two decades through its deep roots in switching services -- electronic payment transfer technology -- or ATM services and other payment processing solutions linked to core banking solutions.
Ramaswamy Venkatachalam, managing director-India at FIS, said that the Reserve Bank of India’s policy of differentiated licensing regimes -- by way of payments banks, mobile wallets and microfinance institutions, among others -- has further enhanced the financial technology giant’s exposure to the local market.
Its Indian clients include Bandhan Financial Services, FINO Payments Bank, and Fincare Small Finance Bank, among others.
A measure of FIS’ success is that it has managed to sign up these smaller financial institutions in a market dominated by IT services giants Tata Consultancy Services (TCS) and Infosys.
The homegrown rivals offer their own core banking solutions apart from being among the largest system integrators (SIs) in the market. FIS, too, serves as a system integrator, thereby becoming an end-to-end service provider. This has also helped the company make a mark in the mainstream banking market.
"Every market is a unique challenge and India is no exception. There is no denying that there will be competition," Venkatachalam said. “Since we are coming from behind, there are much stronger incumbents. But the proof of our wins over the past few months tell us that we are ready for the market and we are delivering too.”
The company provides several horizontal services in terms of risk, information security and compliance. Venkatachalam, who has been with FIS for more than a decade, said this makes FIS an attractive proposition.
"We go further than what the regulator says to each of the banking applications without being requested,” he said.
Globally, the rapidly-evolving landscape where banking is increasing taking place on mobile phones has taken large financial institutions by surprise.
According to Venkatachalam, even core banking solutions take a backseat given that application programming interfaces (APIs) with direct industry leaders are more feasible in the payments space. For instance, it makes more sense for a bank to integrate its application with a market-leading taxi or a food service player. FIS is increasingly working on such API-based interactions.
"Anybody who is processing payments in bulk wants to be able to integrate. Most of these are not done in core banking and it is inefficient to do that. We have built a lot of payment APIs, which are leveraged to deliver maximum value," Venkatachalam said.
He added that FIS was able to speed up the generally tedious process of integrating simultaneously with multiple players.
Venkatachalam said that FIS’ division in India was also unique in terms of developing new capabilities such as a platform for processing payments based on the Unified Payments Interface (UPI) as part of its digital payments suite.
“Within FIS, we are a pioneer in this, having built a unique system to deliver real-time payments. Many countries yet don't have a system and hence our India office has taken a lead in building and running something like this uniquely," he said.
FIS is also investing in the adoption of machine learning (ML) or robotic process automation (RPA), as banks usually leave it to software firms to innovate on such deep technologies.
For instance, the company is looking at transaction trends of a few days to predict the demand for cash at particular ATMs on weekdays or weekends.
"Loading more or less money than necessary at ATMs has a large implication on the bank's profitability. It is not a linear formula as it gets affected by festivals or other occasions," Venkatachalam said.