BANGALORE: TCS, Cognizant and Infosys have been major vendors to Bank of America (BofA), one of the world's biggest IT outsourcers. Now, the trio will have to contend with Wipro too. The Azim Premji-promoted company has become an empanelled IT vendor to compete for BofA's future requests for proposal (RFPs), sources with knowledge of the development said.
Among its peers, Wipro has the lowest revenues (as a proportion of total revenues) coming from the banking, financial services and insurance (BFSI) vertical — it's 27% compared to TCS and Cognizant's 42%. Among all verticals, BFSI is the biggest IT outsourcer.
Wipro is seen to be now trying to expand its BFSI exposure. It won a $500-million IT deal from Citibank last year, and now will compete for BofA deals. The $89-billion BofA is the second largest bank holding company in the US by assets. Its 2008 acquisition of Merrill Lynch made it the world's largest wealth management corporation and a major player in the investment banking market.
"Clearly, this (Wipro's entry) will contribute to increased pricing pressure for incumbents such as Infosys. BofA, like other large banks, is looking to drive further cost savings out of its global services portfolio," Peter Bendor-Samuel, CEO of US-based research firm Everest Group, said. Multiple sources told TOI that Wipro's hunting team has been tirelessly pursuing the marquee US bank for the last 20-odd months.
"We have been watching Wipro's moves and can identify three components of its Bank of America Merrill Lynch (BAML) strategy," said Pareekh Jain, principal analyst in US-based research firm HfS Research. The first component, he said, is hiring BAML-experienced talent from competitors at all levels. Wipro hired Shaji Farooq from Infosys in 2012. Farooq was the head of financial services for Americas in Infosys and was also the leader of the BAML account team. Balaji Yellavalli, who was head of client servicing for US financial services and insurance with Infosys, joined Wipro in April as the global head of industry consulting and large deals for banking, capital markets and insurance.
Jain said the second component of the strategy was to enhance its BFSI capabilities. "Over the last two-year period, Wipro acquired Opus (a platform-based mortgage solutions provider), and invested in Opera Solutions (a data analytics firm in BFSI), and partnered with SOA Software. Some of these companies were already working for Bank of America," he said. The third component is aggressive communication of Wipro's capabilities in BFSI.
When TOI spoke to Wipro BFSI head Shaji Farooq on whether it was competing for BofA contracts, he said, "I can't comment on customer-specific things. I don't think it's even true." Farooq said they are constantly looking to expand the customer base in areas where they don't have a presence.
A BofA spokesperson denied Wipro had been accorded a 'preferred vendor' status, but said any vendor could bid for its projects. BofA has several IT services vendors. Last year, it signed a 12-year, $1.4-billion deal with GardaWorld, a global risk management and security services company to manage its cash processing and check imaging services.
Among its peers, Wipro has the lowest revenues (as a proportion of total revenues) coming from the banking, financial services and insurance (BFSI) vertical — it's 27% compared to TCS and Cognizant's 42%. Among all verticals, BFSI is the biggest IT outsourcer.
Wipro is seen to be now trying to expand its BFSI exposure. It won a $500-million IT deal from Citibank last year, and now will compete for BofA deals. The $89-billion BofA is the second largest bank holding company in the US by assets. Its 2008 acquisition of Merrill Lynch made it the world's largest wealth management corporation and a major player in the investment banking market.
"Clearly, this (Wipro's entry) will contribute to increased pricing pressure for incumbents such as Infosys. BofA, like other large banks, is looking to drive further cost savings out of its global services portfolio," Peter Bendor-Samuel, CEO of US-based research firm Everest Group, said. Multiple sources told TOI that Wipro's hunting team has been tirelessly pursuing the marquee US bank for the last 20-odd months.
"We have been watching Wipro's moves and can identify three components of its Bank of America Merrill Lynch (BAML) strategy," said Pareekh Jain, principal analyst in US-based research firm HfS Research. The first component, he said, is hiring BAML-experienced talent from competitors at all levels. Wipro hired Shaji Farooq from Infosys in 2012. Farooq was the head of financial services for Americas in Infosys and was also the leader of the BAML account team. Balaji Yellavalli, who was head of client servicing for US financial services and insurance with Infosys, joined Wipro in April as the global head of industry consulting and large deals for banking, capital markets and insurance.
Jain said the second component of the strategy was to enhance its BFSI capabilities. "Over the last two-year period, Wipro acquired Opus (a platform-based mortgage solutions provider), and invested in Opera Solutions (a data analytics firm in BFSI), and partnered with SOA Software. Some of these companies were already working for Bank of America," he said. The third component is aggressive communication of Wipro's capabilities in BFSI.
When TOI spoke to Wipro BFSI head Shaji Farooq on whether it was competing for BofA contracts, he said, "I can't comment on customer-specific things. I don't think it's even true." Farooq said they are constantly looking to expand the customer base in areas where they don't have a presence.
A BofA spokesperson denied Wipro had been accorded a 'preferred vendor' status, but said any vendor could bid for its projects. BofA has several IT services vendors. Last year, it signed a 12-year, $1.4-billion deal with GardaWorld, a global risk management and security services company to manage its cash processing and check imaging services.
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