- Goldman Sachs, a powerhouse in investment banking, has transformed its India presence. From a back-office of 300 in 2004, it now boasts a 9,500+ strong workforce across Bengaluru and Hyderabad managing complex functions beyond IT. Their recent Center of Excellence in Hyderabad cements India’s position as their largest hub outside New York.
- JPMorgan, a financial services giant with a long history in India (since the 1920s), echoes this growth with over 55,000 employees in its GCCs across major cities. They plan to expand their workforce by 5-7%, highlighting the growing importance of India’s BFSI GCC sector.
This trend extends beyond these two giants. Numerous global BFSI institutions are establishing and expanding their presence in India, making BFSI GCCs a major player in the country’s thriving GCC ecosystem.
“The People Weekly” this week delves deeper into the BFSI GCC segment in India, exploring its impact, scope, and future prospects.
GCC Growth
India’s GCC sector is experiencing explosive growth. Home to around 55% of all GCCs Globally, India is witnessing a GCC revolution of sorts. Currently boasting over 1,600 centres, a CBRE report predicts a 20% surge to 1,900 by 2025. This echoes findings by Goldman Sachs, who report a doubling of GCCs and a near quadrupling of revenue over the past 14 years employing over 1.6 million people..
Industry expert EY forecasts continued expansion, with the market size reaching US$100 billion by 2030, potentially reaching US$110 billion with over 2500 established GCCs.
BFSI GCC Market Growth
GCCs are expected to lease 45-50 million square feet of office space within 2 years, accounting for approximately 40 percent of the total office demand across the top 6 cities, according to a report by Colliers. Of the different sub-sectors in the GCC ecosystem, BFSI GCC sub sector saw a four fold increase in leasing activity in 2023. This speaks volumes about the explosive growth of BFSI GCCs in India.
BFSI GCCs were the pioneers in offshoring work to the Indian subcontinent. Initially started as GICs or Global In-house Centres handling back office operations including IT support, BFSI GCCs are now strategic partners for innovation, technology and high-value services. NASSCOM reports that over 30% of global banking software is now developed in these GCCs. This shows a major shift in how BFSI GCCs are now perceived by the senior leadership and the shift in how they function.
Currently, there are around 100+ BFSI GCCs employing around 3,60,000 professionals which is around 23% of all GCC employees in India. In H1CY 2023 alone 11% of the total new GCCs set up in India belonged to the BFSI sector. Lloyds Banking Group, Blackberry, Mondee, Wayfair, Cowbell, etc have set up their centers in India already.
Already existing BFSI GCCs have also seen a 11% expansion in H1CY 2023. Citibank plans to upm its headcount by at least 5000 people in the next two years. And other players like Bank of America, Deloitte are also expanding their operations and headcounts.
Location Wise, GCCs are majorly concentrated in cities like Bengaluru, Hyderabad, Chennai, Delhi, Mumbai and Pune. Mumbai has seen maximum office leasing by BFSI GCCs followed by Bengaluru and Hyderabad. Reports also suggest that the BFSI GCCs are considering tier 2 cities like
Major growth drivers of BFSI GCCs in India
Talent Pool: India boasts a large and skilled talent pool in the IT sector, especially relevant for BFSI functions. This includes a steady stream of digitally-savvy graduates and experienced professionals. A report published by Deloitte highlights that India has the largest tech talent pool outside of the US..
Digital Transformation: BFSI organisations are rampantly digitising their processes to keep up with technological advancements. Indian BFSI GCCs are at the forefront of this endeavour, providing the technological R&D and solutions needed for digital transformation.
Cost Advantages: GCCs started their journey in India mainly due to the cost advantages, the geography provides compared to other countries. While this remains a factor, the focus is shifting towards the overall value proposition offered by Indian GCCs .
Cybersecurity Expertise: With the increasing importance of cybersecurity, Indian BFSI GCCs are developing strong capabilities in managing cyber risks and building resilience for their global operations.
BFSI GCCs as Employment Generators
By 2030, it is projected that GCCs will create around 45 million jobs. That is a 30% increase. Even though GCCs may not generate as much employment as compared to the IT services sector they have employed a considerable chunk of professionals.
BFSI (Banking, Financial Services, and Insurance) Global Capability Centers (GCCs) have emerged as a major driver of employment in the Indian IT industry, particularly within the financial sector.
BFSI GCC Hiring Trends
GCCs and the IT services industry share the same talent pool. Despite reduction in headcount and slowing down of hiring by the IT sector in India, there was no major hue and cry since GCCs were absorbing them.
Some of the major BFSI GCC hiring trends are
- Demand for Tech Talent: BFSI GCCs are experiencing a surge in demand for tech talent. In fact, nearly 60% of their workforce now holds tech-related positions. To address this need, they’re actively hiring professionals skilled in cutting-edge areas like
- Rise of Hybrid Roles: BFSI GCCs are increasingly seeking individuals with a strong understanding of the financial services industry combined with strong technical skills.
- Leveraging Startup Talent: To drive change and disruption, GCCs are actively recruiting talent from the startup sector who bring fresh perspectives and a willingness to challenge the status quo. This is in fact a symbiotic arrangement where the startup professionals are seeking stability and growth whereas GCCs get their infusion of innovation coupled with technological expertise.
The Future of BFSI GCCs: Embracing Disruption
As the BFSI landscape continues to evolve, so too will the role of BFSI GCCs in India. Here’s a glimpse into the future:
- Focus on Automation and AI: The adoption of automation and AI will continue to reshape the landscape, with GCCs focusing on high-value analytical and strategic tasks.
- Regulatory Compliance: Navigating the ever-changing regulatory environment will be paramount, requiring robust compliance frameworks within GCCs.
- Data Localization: Data privacy and security will remain a critical concern, with an increased focus on data localization within BFSI GCCs.
- Tier 2 & 3 City Expansion: As the demand for talent continues to rise, BFSI GCCs are likely to expand their presence beyond major metros like Bengaluru, Mumbai, and Delhi. Tier 2 and 3 cities offer lower operational costs and a growing talent pool, making them attractive locations for future expansion.
The rise of BFSI GCCs in India represents a significant development in the global financial landscape. These centres are not just driving cost efficiencies but are also fostering innovation and contributing to the development of a skilled workforce. As the industry continues to evolve, BFSI GCCs are poised to play an even more critical role in shaping the future of finance. With a focus on automation, talent development, and strategic growth, India’s BFSI GCCs are well-positioned to maintain their leadership position in the years to come.
PeopleLogic Opinion
India’s BFSI (Banking, Financial Services, and Insurance) sector has witnessed a surge in Global Capability Centers (GCCs). Fueled by a skilled STEM workforce and cost advantages, these centres have grown rapidly, creating over 360,000 jobs and contributing significantly to the country’s GDP. Looking ahead, BFSI GCCs are expected to evolve beyond back-office functions, driving innovation and contributing to new business models. This, coupled with their expanding footprint in Tier 2 & 3 cities, will further propel job creation and economic growth, solidifying their position as major contributors to India’s financial future.
Leveraging the burgeoning growth of BFSI GCCs in India, PeopleLogic who is considered one of the top GCC hiring specialists, is strategically positioned to be a key talent provider. With a proven track record of serving a strong portfolio of existing BFSI GCC clients, we possess a deep understanding of the specific skill sets and experience required for these centres. This enables us to effectively source, assess, and deploy top-tier talent aligned with the evolving needs of BFSI GCCs.
