HCL wins huge Citibank BPO deal; to hire 800 employees for the work

BANGALORE: HCL Technologies’ BPO arm has bagged a large outsourcing contract – which some analysts estimated at $200 million -- from Citibank to roll out a new process of the bank scheduled to commence in August. HCL will set up back-end processes for loans, financial products and customer service . The company will hire about 800 employees for the work. “The hiring process began in June,” said sources familiar with the deal.

When TOI contacted HCL, the company said, “HCL does not respond to market rumours .” Citibank also declined to comment on the deal. Recently, HCL Technologies bagged a $250 million outsourcing deal from Union Bank of Switzerland (UBS) that involved setting up an offshore delivery centre in Bangalore and hiring 1,000 people. HCL is betting big on the banking , financial services and insurance (BFSI) space; financial services accounted for 46% of its deal wins in the March quarter.

Amneet Singh, VP-outsourcing at global advisory firm Everest Group, said, “Citibank was scouting for partners to explore opportunities to diversify beyond their tie-up with TCS. Global financial institutions are looking to extend their offshore footprint, keeping an eye out on the extent of value generated from these contracts.”

Many MNC banks are following a strategy wherein they do high-value proprietary work in their captive centres and outsource non-core operations like IT support and data management to third-party IT companies. Though cost arbitrage continues to be an important lever in BPO services, BPO players are moving up the value chain doing complex work in a host of areas including analytics, and regulatory and compliance work in financial services .

Integrated BPOs, those that combine IT and BPO, are posting particularly good numbers . Infosys, for instance, lowered its guidance for the current financial year to 5%, but its $500-million BPO arm is expected to grow threefold during the same period.

Similarly, HCL Technologies outperformed expectations with revenues growing 2.5% in the March quarter compared to the preceding quarter, and margins were ahead of the estimate on the back of the BPO business turning profitable.

IN THE KITTY

Analysts estimate the deal at $200 million HCL will set up back-end processes for loans, financial products and customer service for Citi The company will hire about 800 employees for the work.