Regional Banks Profitability Boosted in Partnership with Coforge

Regional banks today face many challenges due to a slow economy, rising interest rates, an evolving tech landscape, and increasing regulatory demands, all of which have created significant pressure on their revenue and cost structures. These challenges are compounded by their limited access to advanced technology, constrained budgets, and restricted reach to global talent.

Moreover, compliance with a complex and evolving regulatory environment requires substantial resources.

In response, regional banks are exploring technological innovation, operational efficiency improvements, and strategic partnerships to enhance their operational efficiency, customer experience, and overall competitiveness.

In contrast, larger global banks leverage their expansive resources, with thousands of employees in operational and technological hubs worldwide, working tirelessly to stay innovative. These competitive advantages for larger banks coupled with existing economic factors may put the current profitability of regional banks at risk.

For instance, the 2024 Banking and Capital Markets Outlook by Deloitte, anticipates increased pressures on revenue and cost structures. They would be influenced by a slow economy, rising interest rates, a rapidly evolving tech landscape, and increasing regulatory demands, among other macroeconomic factors.  

Recognizing the need for a solution, a mid-tier bank and Coforge established a mutually beneficial partnership, more than 17 years ago.

Coforge is a firm deeply rooted in technology-driven solutions, underpinned by substantial investments in advanced AI technologies, profound domain expertise, and a globally renowned presence. This relationship drastically evolved over the years from being one that was purely focused on cost arbitrage to that of a strategic partner equally invested in driving the national growth story of the bank and being a source of competitive advantage.

Certain key tenets have stood out during this evolution:

1. Performance-driven Pricing
   

   
   Coforge's business strategy has transitioned significantly toward a 'pay-for-performance' model, which is closely tied to the results achieved rather than sticking to a fixed cost structure.

   This dynamic approach has been implemented in almost 90% of the operational work conducted for the bank. Remarkably, it still guarantees that service levels consistently exceed 99%. This model reflects a deep-seated trust in the partnership, enabling banking operations to adapt their cost structure to be more variable — a feat that would be challenging to replicate with an in-house team.

   By directly correlating compensation with performance outcomes, Coforge has fostered a mutually beneficial environment. This arrangement aligns their interests with those of the bank, creating a collaborative atmosphere conducive to achieving shared goals. Such a strategy has been instrumental in delivering optimal results, evident in enhanced efficiency, cost reduction, and improved service quality for the bank. This innovative approach not only benefits Coforge and the bank but also sets a precedent for effective and efficient service delivery in the industry.

2. Access to Advanced Technologies and Expertise
   
   
   

   Coforge has significantly invested in cutting-edge technologies and expertise, granting banking clients comprehensive access to these resources. This collaboration has enabled our banking clients to utilize advanced technologies and skilled professionals without the burden of substantial investment in IT infrastructure and training.

   We also recently rolled out an automation system for a bank, streamlining their Electronic Deposit Management product setups by automatically processing new setups and synchronizing data across their various banking applications, achieving an impressive 80% automation rate with a 90% accuracy level.

   This strategic implementation dramatically boosts the bank's operational efficiency and ensures greater consistency in new product setup processing. Tech companies, such as Coforge, are frequently at the forefront of innovation. By partnering with such firms, banks can harness the benefits of advanced technological breakthroughs without the necessity of internal innovation, ensuring they remain at the leading edge of technological developments.
   
   
3. Extensive Domain Expertise
   

   
   Coforge has leveraged its extensive domain expertise to develop cost-effective solutions in critical areas such as Customer Experience (CX) and Quality Assurance/Quality Control (QA/QC), specifically tailored to enhance core banking functions.

   Our banking client has capitalized on these solutions, utilizing Coforge’s expertise in centralized QA/QC operations, risk management, customer support contact centers, dispute resolution, and compliance with fraud and financial crimes regulations.

   By delegating routine and specialized tasks to Coforge, our banking client is positioned to focus more intently on its core business objectives and strategic initiatives, which could significantly improve its financial performance. Coforge’s cost-effective solutions have helped our banking client shed 40% of its onshore costs accounting for $75 million in cumulative savings in the past 5 years.
   
   
4. Market Expansion
   

   
   
   We have dramatically enhanced its global reach by establishing delivery centers in strategic locations such as India, the Philippines, Mexico, and the USA. These international sites have multilingual capabilities and a deep understanding of local market dynamics, including regulatory frameworks, cultural nuances, and consumer behavior.

   This expertise is vital for banks venturing into new territories, as it ensures superior customer services tailored to each market’s unique demands. Partnering with Coforge has offered our banking clients cost-effective expansion opportunities, allowing them to capitalize on Coforge’s established infrastructure and resources. This collaboration not only facilitates operational flexibility but also significantly accelerates time to market in these new regions, which has been imperative in the bank’s journey to expand nationwide.

   The enduring partnership between a mid-tier banking client and Coforge has undergone a remarkable evolution spanning 17 years. What initially began as a cost-focused alliance has now flourished into a pivotal driver of our banking client’s national growth and competitive edge.

   This transformation owes its success to several critical elements. The 'pay-for-performance' model has forged a deep trust between the two entities, aligning their interests and pushing operational efficiency and service quality to exceptional levels. Access to cutting-edge technologies, coupled with Coforge's expertise, has enabled banks to remain at the forefront of innovation without substantial internal investments. Furthermore, Coforge's domain knowledge has delivered tailored, cost-effective solutions that allow organizations to concentrate on core objectives.

With Coforge's global presence and localized insight, bank’s expansion efforts have been streamlined, reducing time-to-market, and ensuring superior customer service in new markets.

This partnership is an inspiring example in an industry where regional banks grapple with challenges. It underscores the power of collaboration and strategic adaptation. As banks continue their growth journey, collaboration with Coforge remains a cornerstone for strategy, emphasizing the significance of robust, cooperative relationships in achieving sustained growth and maintaining a competitive stance in the dynamic banking sector.

To know more, connect with us at coforgeBPS@coforge.com

About Coforge

Coforge is a global digital services and solutions provider, that leverages emerging technologies and deep domain expertise to deliver real-world business impact for its clients. A focus on very select industries, a detailed understanding of the underlying processes of those industries, and partnerships with leading platforms provide us with a distinct perspective. Coforge leads with its product engineering approach and leverages Cloud, Data, Integration, and Automation technologies to transform client businesses into intelligent, high-growth enterprises. Coforge’s proprietary platforms power critical business processes across its core verticals. The firm has a presence in 21 countries with 26 delivery centers across nine countries.

For more information on Coforge, please visit www.coforge.com