UK-based Standard Chartered bank that spends around $1 billion annually for its tech requirements prefers to keep away from the hype cycle and the jargons that the technology industry comes up with every year.
David Awcock, Group Head of Technology, Standard Chartered, believes that the recent buzzwords like cloud computing, virtualisation or analytics are something that have been doing the rounds in the industry for long.
Citing Standard Chartered’s example, he says the bank has two data centres (DC), one each in UK and Hongkong. “We have had these for years. All our services are provided from these centres. For example, our HR system is accessed by each and every employee spread across 70 locations around the world from one of these DCs. That is Cloud for us. But being a bank, I do not think we can throw open our data in public. There are security and regulatory issues involved,” he added.
Awcock also believes that the word ‘innovation’ has also been hyped. “Too many people are just throwing it out. I have worked in the tech industry for a bit too long. We have been very cautious and sceptical of the claims that are made from time to time,” he told Business Standard, on his recent visit to India.
Even when it comes to outsourcing, Awcock says that the bank has opted for keeping a majority of its IT operations in-house. “We are very clear that technology is a key enabler. I think we are one of the most successful banks in the world. We are among the few global banks that run their own core banking; and we rather develop it in-house. And we took this to 40 countries. It is not that we didn’t think of sourcing it out to a third party, but this is our value proposition,” said Awcock.
Standard Chartered, that set up its captive unit, Scope International in 2000 in Chennai, has a team of 10,000 people, of which 40 per cent are focused on technology offerings and support to various centres. Scope is a fully-owned subsidiary of the bank.
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Besides, the bank also has another 8,000 people in its technology department and has 4,200 people working out of India. Of this, 30 per cent of the tech support team belongs to third party vendors. Tata Consultancy Services and HCL are two major partners of Standard Chartered.
“The external spend on technology is 30 per cent for the bank. We have over the years preferred to manage our IT ourselves, unless there is a clear advantage that we see. We do work with IT vendors. These are fixed price contract relations. For instance, we have a large project on security with TCS; they have a few hundred people managing it. We have a new project on cash management, but are yet to decide whether it is going to be in-house or outsourced,” he added.
Awcock shares that he is always approached by IT vendors for new projects.
“We have suppliers with whom we are comfortable, and we do business with them on managed basis. Many approach me and say that they can have a look at our systems and recommend something new. But we have internal consultants who look at what we need. If we do not have in-house capability, we will look at a third-party provider.”
For a company that has been in India for over 100 years and also a strong captive unit, it is obvious to know that this region is crucial.
But Awcock agrees that global conditions are changing and the Indian IT firms will need to prepare themselves.
“The community that you have presence in also becomes a stakeholder in your business. Add to this the political dimension around unemployment is getting much more stronger. While each country will have to tackle it differently, many customers will ask vendors to deliver services from their shore. These dynamics will be key over the next two to three years. But then there will be companies who still want to get cost advantage and resolve their internal issues,” said Awcock.