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Banking on Home Rule

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DQI Bureau
New Update

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

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Recently, Polaris acquired Chennai based banking solutions company, Laser
Soft, for Rs 52 crore. Laser Soft, despite its small stature has an impressive
list of clients for its banking products in India and the Middle East. The
company has BFSI products that ranges from core banking to mutual funds, and has
around fifty clients with names like Corporation Bank, ICICI, SBI, Andhra Bank,
among others. Laser Softs solutions are benchmarked for handling more than 20
mn 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 also be looking at other emerging markets like Chile, Vietnam, and Egypt
among others.

While the domestic banking arena is still a three-horse
race, there are growing opportunities for the likes of Polaris and Saksoft
to cash in
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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 the 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 Softs products.

Another company that is betting big on the BFSI segment is Saksoft. Its an
emerging IT services and products company that has recently launched a BFSI
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 BI solutions, its 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. IDC
too sketches a positive BI market outlook. According to an IDC report, by 2013
enterprises will increase their spendings at the rate of almost 10% in this
sector.

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While globally the recession was most felt in the BFSI space, the Indian
financial services space, by and large, has been insulated from it. With IT
spending expected to go south globally, it makes more sense for companies to tap
into the domestic market more aggressively. Thats what companies like Polaris
and even smaller ones like Saksoft are doing, and it looks like the best
strategy in the current market scenario.

Shrikanth G

shrikanthg@cybermedia.co.in

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