• Notification Date: 15-10-2024
• Notification No: N/A

How BFSI GCCs have driven India’s growth and become a $20 billion business

•India’s BFSI GCCs have gone through a remarkable evolution, evolving from simple support functions to key players in the global financial ecosystem.
• As reported by the Times of India, a joint study by Withmatic and EY revealed some interesting data.
• Here is a brief look at their evolution, current role, and future potential.  

The Beginnings: From Back-Office to Strategic Hub   

BFSI GCCs in India started out as back-office centers handling critical tasks like customer service and IT support, with an aim to reduce costs.
Over time, BFSI GCCs have evolved from operational centers to innovation hubs. Now, they develop and deploy advanced technological solutions, making India integral to the global operations of many multinational companies.
Today, GCCs are focused on providing high-end services beyond back-office operations.

Key areas include:   

• Cloud Computing
• AI/ML and Generative AI
• Data Analytics
• Blockchain
• Cybersecurity
• Open Banking APIs
• Robotic Process Automation (RPA)  

The talent pool in India has matured significantly, and these centers are now handling complex tasks such as:
• Fund Accounting
• Treasury Management
• Tax Reporting
• Regulatory Compliance
Moreover, the Indian workforce has proven itself capable of delivering these services at a fraction of the cost compared to developed markets. 

Status of BFSI GCC in India   

Currently, there are 170-175 BFSI GCCs in India, run by around 85-90 MNCs.
These centers have achieved a compound annual growth rate (CAGR) of 6.6% over the past decade.
A combined study by Wizmatic and EY revealed the succeeding data:  

Major Cities:   

• Bangalore dominates the GCC scene, accounting for 25-30% of the total BFSI centers.
• Mumbai and Delhi NCR contribute around 15-20% each.
• Hyderabad and Chennai are also key hubs for the growing number of GCCs.  

Explosive Revenues:   

• In 2020, BFSI GCC generated revenues of $13.4 billion.
• By 2023, this figure will increase to $20.8 billion, representing a staggering increase of 16%.
• The upward trend is expected to continue, with sales expected to reach $24.6 billion by 2024. 

Talent Pool   

• India’s BFSI GCCs employ an estimated 540,000 people.
• This makes them a major employer in India’s technology and finance sectors.  

Competitive Salaries: Attracting Top Talent   

• Indian GCCs offer competitive salaries, especially for technical roles, which are around 12-20% higher than those offered by traditional IT services companies and non-technical companies. • This higher salary has enabled BFSI GCCs to attract top talent, especially in technology-focused roles.   

But why did BFSI GCCs develop in India?   

Two major global crises contributed significantly to the rise of BFSI GCCs in India:   

2008 Financial Crisis   

• The crisis led to increased regulation on global banks such as Dodd-Frank. This forced banks to overhaul their compliance and risk management.
• Banks turned to GCC in India to handle these operations efficiently and cost-effectively.   

COVID-19 Pandemic   

• The pandemic accelerated the shift to digital banking due to disruption of physical operations.
• BFSI GCC played a key role in ensuring business continuity and enabling the shift to work from home.  

Impact on the India IT & Technology Ecosystem   

The growth of BFSI GCC has not only created jobs but also had a transformative impact on the broader IT & Technology ecosystem in India.
With global financial institutions increasingly preferring to outsource critical operations to Gulf countries in India rather than to external service providers, some traditional IT services companies have lost business.