“Continued investment in cutting-edge technology is vital for cooperative banks to counter the heightened competitive and regulatory pressures,” says Devadatta Chandgadkar, CEO of Saraswat Infotech. “They want to be ahead in the technology curve to use cutting-edge digital solutions and service their customers.”
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That’s why software like Finacle is aspirational for the urban cooperative banks, says Aniruddha Gharat, Chief Operating Officer of Best of Breed Software Solutions (BBSSL) in Bengaluru. Furthermore, the number of branches ranges between five and 35 for a UCB, which makes it a small engagement for a software developer. The IT team of a UCB is less than five people. However, UCBs cannot afford to spend on advanced banking software or hire a team to manage the IT operations. “They also have the richness of banking relationships with their customers.” “The geographic and demographic reach within the urban and rural populace of UCBs is unmatched,” says Vidyadhar Anaskar, Vice-president of the National Federation of Urban Cooperative Banks and Credit Societies. “The UCB landscape is being reshaped by several forces in the new normal– rapidly changing customer behavior, new agile competitors, and evolving regulations,” said Venkatramana Gosavi, Senior Vice President & Global Head of Sales, Infosys Finacle in a statement. The emerging urban cooperative banks opportunity So, how does this domestic market segment even make sense for Finacle? The answer: SaaS (software as a service). Until now, urban cooperative banks depended on local service-providers for their maintenance, and have lagged in adopting large-scale digital solutions. But these banks lack the technology budgets of public sector banks. With more than 1,500 UCBs in India, the addressable market is certainly large. This means the banks only pay for what they use without significant upfront investments. The upshot: The three UCBs would benefit from an opex model of spending for technology transformation. They would use Finacle, the flagship core banking software of Infosys’ subsidiary Edgeverve Systems, to modernise their business and operations. The three UCBs were Vidya Sahakari Bank, Urban Co-operative Bank in Bareilly, and Zoroastrian Cooperative Bank. In mid-June, Infosys announced three urban cooperative banks (UCB) in India as customers for its banking software, Finacle.