Banking on Financial Services

The domestic banking solutions space is
still a hot segment with lot of market potential in market. While
merger mania continues in the Silicon Valley, closer home some of the
product companies are betting big on the domestic BFS space. Two
Chennai based companies-Polaris Software, a BFS products and service
company and Saksoft, a midsized IT company have chalked out aggressive
domestic forays.



Polaris since the Oribetch merger has aligned its BFS product on the
Intellect Suite is aggressively expanding its domestic business.
Recently Polaris acquired Chennai based banking solutions company
called Laser Soft in a cash deal for Rs 52 crore. Laser Soft despite
its small stature has impressive list of clients for its banking
products in India and the Middle East. The company has BFS products
that ranges from core banking to mutual funds and has around 50 clients
with names like Corporation Bank, ICICI, SBI, Andhra Bank, among
others. Laser Soft’s solutions are benchmarked for handling
more than 20 million accounts.



So what made Polaris go for this small company? Says Arun Jain,
chairman and ceo, Polaris, “Our strategy is to evolve Polaris
into a leader in financial technologies and for that our strategy is
account expansion and product expansion and this acquisition brings
complimentary products into our fold that will enable us to expand
significantly in the domestic market.”  Company
sources say that the acquisition is in line with Polaris’ 3.0
strategy which is aimed at driving Polaris to the next orbit.
While India is the major focus area, Polaris would be looking at other
emerging markets like Chile, Vietnam, and Egypt among others as well.



For FY 09, Polaris posted top line revenues of Rs 1,315 crore and grew
by 26%. It managed to get 12% of revenues from the domestic market
during the period. This component will grow significantly with Laser
Soft acquisition. Moreover Polaris will also gain expertise to offer
solutions in the price band that will work out effectively in the
domestic market as it can now leverage on Laser Soft’s
products.



Another company that is betting big on BFS segment is Saksoft.
It’s an emerging IT services and products company that has
recently launched a BFS specific BI product called Veri-sens. Veri-sens
solution can significantly bring the costs down as it offers pre-built
data models across multiple functional areas. According to Aditya
Krishna, founder and managing director, Saksoft Group,
“   Veri-sens works with any transaction
processing solution and complements the operational reports available
from these systems by meeting the analytical reporting requirements of
senior and middle management”



Looking at the demand for the BI solutions it’s really huge
and a big opportunity waiting in the wings. For instance if we look at
a Gartner study it says that by 2012, 40% of the total IT spend will be
concentrated on BI. Market researcher IDC too sketches a positive BI
market outlook. According to an IDC report it states that by 2013
enterprises will increase their spending at the rate of almost 10% in
this sector.While globally the recession was most felt on the BFS
space, the Indian financial services space by and large has been
insulated from the larger recession. With IT spending expected to go
south globally makes more sense for companies to tap into the domestic
market more aggressively. That’s what companies like Polaris
and even smaller ones like Saksoft are doing and it looks a like a best
strategy in the current market scenario.