Infosys CEO Vishal Sikka's innovation push gives fresh lease of life to Finacle

Vishal Sikka's drive to put innovation at the core of Infosys culture by offering new products and solutions is underlined by the CEO promising to double the company's investment in its core banking product, Finacle, which until late last year was being considered to be sold-off.
With Sikka at the helm, Infosys has shelved plans to explore selling off its banking product Finacle, as the Board of Infosys until late last year wanted to spin off Finacle and then look out for a buyer, two executives directly familiar with the development told ET.“The proposal was brought before the board in October last year," one person directly familiar with Board told ET, adding that it was subsequently shelved because company's transition process started. “The thinking was to spin it off as a subsidiary and then evaluate firms which could take it," said the second executive directly familiar with the process.
An Infosys spokeswoman declined to comment.
Although Infosys does not share revenues generated from its core banking product, over the last three years Finacle has seen revenues dip from $314 million in 2012 to $297 million by the end of March 2014, estimates advisory firm Nelson Hall. This was mainly on account of poor demand from banks to invest in next generation core banking solutions and company's inability to tap into the large US market, said one former Infosys executive.
For now, Infosys clubs revenues from Finacle along with its clients from the banking, financial services and insurance space, which accounts for a little over 33.5% of company's $8.25 billion revenues.
Last week, Sikka told industry participants at an Infosys customer event in Berlin that among other things, he plans to double investments in Finacle, without sharing details. Some experts, including Rachael Stormonth, senior vice president at Nelson Hall, believe that Infosys may look at expanding Finacle brand to include insurance, something which Mumbai-based TCS has done with its core banking product BaNCS.
“Sikka did say he will double his investment in Finacle," said Stormonth, adding that the investment could include adding functionalities around its “mobile banking and wealth management." “He also implied a greater push to cross-sell Finacle into Infosys' existing banking client base To be sure, core banking solutions market is believed to be north wards of $20 billion opportunity, according to company executives.
For now, Infosys has been successful in selling Finacle to 170 banks in emerging markets, including Asia Pacific, Middle East and Latin America, and has built customer base in Ireland, the Netherlands and the UK.