FIS in talks with eleven payments banks licensees

NYSE-listed $6.4 billion FIS, the largest provider of banking and payment technology around the world, is in talks with the in-principle licence holders of payments banks, a top executive said.

Talking to Deccan Herald, FIS Managing Director (India and South Asia) Ramaswamy Venkatachalam said, “We are talking to all 11 players. Some will be in more advanced stages and some are taking their own time because they are formulating their strategies.

Almost all players are either looking at appointing consultants or have appointed consultants. They first want to formulate their business strategy and then technology will be one subset on that because they have to decide on operations and also decide on technology.”

FIS provides business processes around software technology, and essentially customers get an end-to-end banking and payment processing platform.

FIS serves over 14,000 clients across the globe. The Florida-headquartered company has presence in Asia-Pacific, Europe, Latin America, and other geographies.

Started with ATMs
Venkatachalam said FIS’ India business started offering switching services and ATM outsourcing services about 17 years ago. “Today we own and manage over 12,000 ATMs in India. All are fully outsourced models. We also have our switching platforms and card management services for more than a dozen clients in India. We also operate full payment processing for co-operative banks.”

For instance, the entire payment channel and ATM outsourcing of private sector lender Karnataka Bank is handled by FIS. It also serves 50 co-operative banks.

Venkatachalam adds, “In 2013, we had an opportunity to re-enter the core banking space. So in India our only core banking customer prior to 2013 was ING Vysya Bank (now part of Kotak Mahindra Bank). In 2013, we got an opportunity with Bharatiya Mahila Bank (BMB).”

“We got the mandate for the complete outsourced technology platform which had to be built in record time because the government wanted the bank to go live in less than three months. So the entire process from RFP (request for proposal) to the bank going live was done in less than 60 days.”

He added, “In 2014, two new banking licences were granted to Bandhan and IDFC. Bandhan chose to go on a fully outsourced technology model and picked FIS. In both cases, Mahila Bank and Bandhan, we competed against domestic vendors of not just core banking, but other software platforms, and won. So we are very happy with the fact that we have started making a strong presence re-establishing our presence from a core banking perspective. Not just in core banking, but also in providing the full stack of services.”

On employees, he said, “Currently we have 9,000. But this includes a lot of our global delivery employees. We have presence in five cities. Bengaluru and Chennai are big centres for us from an IT perspective. We also have presence in Mumbai, Gurgaon, and Chandigarh. We don’t have an India headquarters. Our corporate offices are in Mumbai because that’s probably where most of our clients are.”

As Bengaluru being the FIS centre of excellence, the company is shifting the Financial Inclusion Lab to Bengaluru (at Whitefield) from Kolkata very shortly. FIS has 1,500 employees in Bengaluru.

According to him, the new model banks like payments and small finance banks, and government-run schemes like Jan Dhan Yojana will prove to be game changers for financial Inclusion in India.

He is particularly bullish about payments banks. “It is a new model and not tried anywhere else in the world.”