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Profile: Nandan Nilekani, co-chairman, Infosys
On Islamic banking, the credit crisis and his new role

By Julian Goldsmith

Published: Monday 03 March 2008

Nandan Nilekani is pretty much a legend in his own lifetime. Co-founder of Indian outsourcing giant Infosys, foundation board member of the World Economic Forum, co-founder of the Indian National Association of Software and Service Companies (Nasscom), one of the Time magazine's 100 most influential people in the world 2006 and silicon.com Agenda Setter in 2007 to name but a few of his many accolades, he is a Capability Brown of the modern IT industry landscape.

Visiting the UK to promote the latest version of Infosys' Finacle banking application suite, he took time out to speak to silicon.com about his views on the financial services sector and his new role as co-chairman of Infosys, following stepping down as CEO last June.

Agenda Setters 2007 - Top 20

Find out who made it into silicon.com's Agenda Setters top 20 by clicking on the links below…

1. Mark Zuckerberg Facebook
2. Steve Jobs Apple
3. Eric Schmidt Google
4. John Chambers Cisco
5. Ashley Highfield BBC
6. Nicholas Negroponte OLPC
7. Niklas Zennström Skype
8. Diane Greene VMware
9. Jonathan Ive Apple
10.Viviane Reding EC
11.Paul Coby British Airways
12.Marc Benioff Salesforce.com
13.Emily Bell Guardian Unlimited
14.Larry Ellison Oracle
15.Jeff Bezos Amazon
16.Ben Verwaayen BT
17.Nandan Nilekani Infosys
18.David Yu Betfair
19.Satoru Iwata Nintendo
20.Mark Hurd HP

The financial services sector as a whole is very important to Infosys. Around 38 per cent of its revenue comes from financial services and Nilekani is quick to note that the company works with the some of the world's largest and most advanced financial institutions in the US and Australia, Asia, India and the UK.

Having that kind of penetration, the great and good at Infosys are well aware of the current banking downturn but Nilekani argues many are turning to IT to help cut costs.

He said: "I agree that in the current environment, certainly a lot of financial institutions are challenged by the combination of provincial slowdown in economic growth as well as a lot of the repercussions of credit businesses. But we think that reducing the cost and becoming more efficient, becoming more competitive, streamlining the systems, reducing risk by having single systems, all this is becoming more vital."

Alongside the economic downturn, Infosys has identified a number of areas of increased investment in financial services.

As well as European banks consolidating their infrastructure, there is also a distinct demographic shift. One of these elements is Islamic banking, which is becoming more prevalent throughout the global banking sector. It has its own rules - for instance there is no interest.

It's a parallel form of banking to the established western model, starting as a trend in some Middle-Eastern banks offering Sharia-compliant products. Today, the biggest of the global banks are offering Islamic banking in countries like the UK because it's becoming mainstream for many investors.

Another demographic emerging is the huge Hispanic population based in the US. There are Spanish banks out there that want to cater for that population. It's what they call 'cradle-to-grave banking'. Banks want to catch these customers early and through their lives. Typically, they will have a little in savings when they enter the US, so they need loans. Maybe after time or even a few generations, the family amasses wealth and they get into some investment activities.

Nilekani added: "There is a lot of banking revitalisation happening in Eastern European countries like Poland and Russia because these countries are now modernising and banks are coming in to these countries. And they want to leapfrog the technology. Europe has taken a lead, especially over US banks in actually replacing their legacy."

Finacle 10 is the latest version of Infosys' one-stop-shop core business suite for large and global banks. It covers the gamut of back-end systems for retail banking products and has been designed to cater for these new trends in the financial services industry.

Nilekani said: "For example Islamic banking, which is becoming a very strong requirement in the Middle East. We have a very thorough model for wealth management. We have enhanced its capability for mobile banking. As well as in general multichannel indirect banking, through ATMs, so I think it's huge progress there."

Infosys has invested $60m over the last three years in upgrading to Finacle 10 and it has taken the equivalent of 240,000 man days to build. Inside, the product is more than 40 million lines of code.

Finacle is designed for huge volumes, said Nilekani. It can do 100 million transactions per hour with more than 130,000 concurrent users.

The banking sector aside, Nilekani has seen some shifts of his own over the last six months. He has handed over the reins of the company and taken a more background role. This doesn't mean he isn't still a shaping force for Infosys though.

He said: "My focus today is on a few things. One is I continue to spend a lot of time with our clients, especially on their large transformational programmes. That's an important part of what I do. Secondly, I am involved with a lot of global brand building and global ambassadorship activities. I'm on the foundation board of the World Economic Forum and involved in many other international events.

"The third thing is I work on large transformational opportunities for us to develop existing products like Finacle and to develop other offerings.

"And then finally, I am looking at M&A activities to see how Infosys can look at other acquisitions for its growth. I'm also on the look out for new business models emerging like software as a service and transaction-based pricing and non-linear models of business. So I'm trying to drive some initiatives in that area."

So, does this mean he has more time on his hands to brush up on his golfing technique? If so, he is keeping his private life private.

He said: "My life is very boring, so nothing much to write home about. I'm writing a book though, called Imagining India. It's a book on India through the evolution of information technologies. It will be out in India in November and out in the UK next April or so."