PremiumWipro names Ganesh Balasubramanian as senior vice-president of its newly created banking products and platforms business
Wipro Ltd has hired former Lloyds Banking Group executive Ganesh Balasubramanian to create a new unit focused on banking products and platforms, as part of a move to shore up its banking and financial services business that has lagged rivals such as Tata Consultancy Services Ltd and Cognizant Technology Solutions Corp.
India’s third largest software exporter, which recently hived off its non-information technology business units and started trading as a stand-alone IT stock, has named Balasubramanian as senior vice-president of its newly created banking products and platforms business, according to people familiar with the development who requested anonymity.
Balasubramanian, who previously was the chief technology officer at Lloyds Banking Group, will take up the role in July and report directly to Wipro chief executive T.K. Kurien.
Soumitro Ghosh, who has headed Wipro’s global financial services business since 2008, will continue in his current role and report to Kurien.
Wipro, which gets more than a quarter of its revenue from the financial services business, confirmed the appointment.
“Wipro confirms that Ganesh Balasubramanian will join the company effective July 2013 as senior vice-president—banking products, BFSI in emerging markets and key strategic account relationship. Ganesh was previously with Lloyds Banking Group, where he played a key role as part of the Global CIO leadership team," the company said in an email response.
India’s $108-billion IT sector gets nearly 40% of its overall business from the banking, financial services and insurance (BFSI) sector, where large clients like Citigroup Inc. and JPMorgan Chase outsource projects worth millions of dollars every year to Indian software vendors such as TCS, Infosys Ltd and Cognizant.
For more than two years, Wipro has lagged rivals like TCS and Cognizant and is struggling to turn around its performance in the BFSI segment. TCS gets 43% of its overall business and generates more than thrice as much in revenue as Wipro from the sector. Cognizant gets a similar proportion from BFSI and grew revenue from the sector by 20% in 2012.
“Wipro has been a slow bear in BFSI compared with other Indian counterparts such as TCS and Cognizant," said Yugal Joshi, practice director at outsourcing advisory firm Everest Group. “When the financial downturn happened in 2008-09, Wipro was one of the companies that was least impacted because it has the least exposure towards BFSI. But once the market started to recover a bit, the technology spending went up in BFSI and Wipro was found wanting there because of their lack of exposure."
In April, Wipro gave a tepid revenue growth forecast for the first quarter, raising concerns about whether the turnaround plan overseen by CEO Kurien was working.
After the fourth quarter results were announced in April, Kurien admitted that Wipro had started slowly in BFSI and needed to step up its performance in the sector.
“If you look at banking, we’ve traditionally had a very poor footprint, being late to start off in the game, and I think some of the fact that our footprint and some of the customers that are doing well or not has been reflected in our topline growth. And we were overweight again on investment banking, which has been under pressure," Kurien had said.
Kurien said Wipro would focus on “deepening our footprint in BFSI (banking, financial services and insurance), not using traditional, but non-traditional methods."
For the 2012-13 financial year, revenue from Wipro’s financial services business grew sluggishly at 3.7% to $1.65 billion, lagging the company’s overall revenue growth of 5%. Wipro expects the appointment of Balasubramanian will help it compete better with rivals such as TCS and Cognizant.
Experts tracking the sector feel Wipro will find it difficult to make significant headway in BFSI, given the competitive landscape and their relatively less established footprint in the sector.
“Now the challenge is that there is very limited business in the market—most of the business is coming from renewals and the service providers are going all out to maintain their existing clients," said Joshi of Everest Group. “Now if Wipro wants to win business from any fresh, new BFSI client, it will be very tough for them…the marketplace is becoming hyper-competitive and no other service provider will gave away even an inch. There is a lot of pressure on pricing. So the challenges for Wipro are going to increase going forward."
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