After leveraging offshore technical talents in India through its technology partner, ITC Infotech, Danske Bank, Denmark’s largest lender, has now decided to start its own captive technology centre in the country.
To be known as Danske IT, the captive technology centre would employ around 1,000 people to begin with when it starts the operation in the second half of the next year, multiple sources privy to this development said.
The new strategy to establish its direct presence for technology back office operations in India is said to be in line with the strategy that Jim Ditmore, the new chief operating officer (COO) and group head for IT and services has laid out for the bank, the sources added. Ditmore who joined Danske Bank in March this year was previously with Barclays where he was the chief information officer (CIO) for retail and commercial banking operations.
To start with Danske has hired Pankaj Gupta, the Global IT Head of Retail Banking and Wealth Management at HSBC, to head its technology operations in India, with effect from December 1, 2014. To a detailed questionnaires sent by Business Standard, Danske confirmed the development. “We have recently launched a new IT strategy where one of the important initiatives is to improve collaboration by building global teams across sites. A fundamental lever for that is increased control and flexibility in the Indian operations”, Jens Klæbel, senior vice president from Danske Bank, said.
Danske’s outsourcing engagement with ITC Infotech dates back to 2006 when the latter set up a dedicated development centre in India to manage the bank’s entire IT operations. Even though initially it was planned to be set up in build-operate-transfer (BOT) model, Danske slowly realised the importance of the centre and continued to operate that with the help of ITC Infotech, a mid-sized IT services company and a wholly-owned subsidiary of cigarette to hospitality major ITC Ltd.
Over the year, Danske has grown to be the largest client for ITC Infotech accounting to around 20 per cent of its overall revenues of around $200 million (around Rs 1200 crore) per annum. Besides, team that works for the Danske project is also understood to have grown to around 800 now.
“Over the last eight years, Danske Bank has gained a profound level of experience and insights into running an IT operation in India and has built a strong partnership with ITC Infotech … This now allows for more independent operations by building global teams with own IT professionals, thus expanding Danske IT, Danske Bank’s subsidiary in Bengaluru,” Klæbel added.
Sources also said that Danske has agreed to hire around 300 resources of ITC Infotech who work on its project, for its own captive technology centre and has started doling out offers. However, the joining for these candidates will be effective from August 1, 2015.
ITC Infotech declined to offer any comment to a query on what will be its future relationship with Danske. However, Danske said that ITC Infotech would continue to be its strategic partners.
“ITC Infotech and Danske Bank will remain long term strategic partners, as there is a continued need for IT competencies in the bank,” Klæbel said. “ITC Infotech will continue to provide multiple IT services and solutions to Danske Bank,” he added.
