Global Innovation Centers are Transforming the Banking Sector & Customer Experience

Mohua is a digital evangelist, With over 25 years of diverse experience in the IT, banking and financial services industry, brings a rich global expertise to Mashreq and she leads a team of professionals who collaborates with teams from the Middle East and global financial hubs.

India has, over the past few decades, emerged as one ofthe largest exporters of all technology services(IT, BPO, KPOs)in the world. The large talent pool in the country, the thrust on technology adoption, and the fact that India is one of the few bright spots in a gloomy economic environment combine to give India an excellent opportunity to become a hub for technology and innovation, not just for India’s needs but for the world’s. One of the important trends in this context is that an increasing number of multinational corporations are leveraging Indian talent through the establishment of their global innovation centers (GICs) in the country.

In the early days, GICs were seen merely as a means of achieving cost arbitrage. Things have changed significantly since then. Today, GICs are thriving hubs of top-notch talent and leading-edge innovation. As per industry reports, as of September 2022, there were more than 1,500 GICs in India, including those of some of the largest companies in their sectors. For many large global corporations, India has the largest workforce by geography. India has more than 45 percent of the GICs in the world outside of the home countries of their parent organizations. Between 50-70 percent of their global technology and operations workforce are based out of these GICs.

India is earning a glowing reputation for GICs that adhere to high standards of excellence, accountability, and technology adoption. The success of this thriving sector is having a positive ripple impact on the national economy in terms of employment, consumption of goods and services, and financial savings and investments. The banking, financial services, and insurance (BFSI) sector is one of the most important pillars of the Indian economy, and BFSI GICs assume great importance from yet another perspective helping BFSI.

GICs have helped the BFSI industry to transform its global service delivery model. GICs are not only influencing the global strategy of their parentcompanies but also helping them execute it

The Role of GICs in the BFSI Sector
GICs have helped the BFSI industry to transform its global service delivery model. GICs are not only influencing the global strategy of their parent companies but also helping them execute it. They can assist with providing all kinds of services, ranging from the implementation of solutions based on such as Cloud, Data Analytics, Artificial Intelligence (AI), Machine Learning (ML); to chip design, system design, and software development to routine administrative work. GICs today help BFSI companies meet compliance requirements, enforce policies, enhance consumer experiences, enable personalisation, contain costs, improve operational efficiency, and facilitate the convergence of front and back office operations.

India is home to almost 170-175 BFSI GICs operated by 85-90 MNCs. Almost a fifth of all GIC employees in India work in the BFSI sector, although BFSI GICs only account for a tenth of the total number of GICs a statistic that underlines the demand for talent in one of the most important sectors in possibly the most transformative era in recent decades. These GICs are powerful engines of enterprise transformation for BFSI companies and are reorienting their operations from a volume based model to a value-based one. Time and again, they have demonstrated the ability to improve resilience and meet the expectations of their parent organizations. As an innovative challenger bank, Mashreq, through its MGN services, support the bank’s global expansion through digitalization, innovation, and seamless customer experience. The teams work closely across different business and functional groups towards building innovative products and services to deliver an unmatched customer experience.

Levers of Growth & the Way Forward
With more and more leadership positions and global roles coming to be based out of India, GICs are shaping up into business solution centers. BFSI value chains are evolving at a rapid pace, and GICs are helping the sector keep pace with these changes and find new ways to sustain and achieve growth. By collaborating with finTech companies or technology partners for solutions in areas such as digital lending, payments, and risk surveillance, GICs are driving innovation at a furious pace in all the right directions. Legacy systems are being modernized and new-age technologies are being used to enhance customer experiences and transaction journeys from end to end. There is a stronger focus than ever on strengthening cybersecurity and mitigating both internal and external risks. ESG has become an important consideration while formulating operational, marketing, and communication strategies. Workforces are being upskilled, reskilled, or hired with a view to keep pace with the latest technologies, trends, and developments of the times.

In the years ahead, BFSI GICs will continue to focus strongly on end-to-end digitalization, value-centric innovation, and risk management. As a EY report in 2021 noted, GICs are well positioned to create greater business value for their parent organizations, who, in turn, will need to determine the best approach to collect and use data to predict uncertainties, mitigate risks, and reimagine their business models for faster growth. India has taken giant strides in recent years in terms of connecting millions of people with government schemes and financial services with the creation of digital identities and the India stack. Indian consumers are becoming increasingly familiar and comfortable with making financial transactions and accessing financial services online.

It is a great time for BFSI companies to find new ways of reaching out to consumers and design new offerings. GICs are in for exciting days!