Looking to maintain its edge as India’s most valuable commercial bank, ICICI Bank Ltd is quietly putting in place the country’s largest financial services hubs.
ICICI, whose market capitalization far exceeds any other Indian bank, plans four such hubs across the country that will eventually employ as many as 70,000 to provide support functions for sales, operations, call centres and technology support.
“This is a first-of-its-kind project in terms of scale,” confirmed Madhabi Puri Buch, head, operations, at the bank.
“Though the operations of the bank are already centralized, we want to move our entire back end to these hubs to ensure seamless banking operations. It also stands to benefit our other subsidiaries, like insurance and asset management, that are growing in leaps and bounds.”
Until now, only foreign banks such as HSBC, Citibank, Standard Chartered and ABN Amro have set up captive business process outsourcing units spread across thecountry. These units, on an average, employ 10,000-12,000 employees each.
ICICI has already started work in Hyderabad for the south and Gandhinagar in the west.
The Hyderabad hub, covering four million sq. ft, will eventually house 25,000 to 30,000 employees. The bank has recruited 2,000 employees so far.
The move is part of a ‘hub-and-spoke’ strategy that the bank, India’s largest private sector bank, has adopted. The project, to be fully operational by 2012, will likely benefit customers of the bank in terms of continuity of services.
The hub will be a captive business process outsourcing unit for multiple operations, including Prudential ICICI, the largest private-sector insurance player, and ICICI Lombard, the general-insurance player.
According to Buch, the genesis of this idea came from the international side of ICICI.
“We have an Internet-based product called High-Save that caters to Canadian and British customers,” said Buch.
“This is 100% outsourced to India. We realized the potential of this opportunity when we saw customers of Canadian and British origin signing up more and more with High-Save as we were able to offer the best cost advantage.”
Added Buch: “If this was what we could achieve with a slice of our clientele, we thought that if we take it up on a larger scale, we could cater to our wide customer base back home.”
Over $12 billion in international operations of the bank contributes about 17% of its total revenue.