ARIBA IN TALKS WITH INSURERS, BANKS

Mumbai: Faced with pressure on profits due to rising interest charges, banks and financial services companies are looking at deploying spend management solutions to cut costs. Spend management can help banks, financial services and insurance companies, which are generally topline and growth focused, to cut costs, said Mr Thulasidoss Sivakumar, Group Director – South Asia, Ariba Solutions, provider of spend management solutions.

Ariba, which already provides services to insurance companies such as ICICI Prudential, ICICI Lombard, Aviva India and HDFC Standard Life, is also in talks with some Indian banks, he said.

“The banking sector is traditionally focused on growth and increasing their reach through branches and introducing new products. For majority of the banks about 30-40 per cent of revenues go into spending. With the increase in interest rates and pressure on margins, banks are also looking costs through spend management,” Mr Sivakumar said.

Some areas where banks incur huge costs are marketing, postage and courier, IT and technology such as ATM machines, printing machines, note-counting machines and also on furniture in case of branch expansion.

“A large bank in India spends about Rs 2,000-4000 crore every year. If spends are managed efficiently, a bank can save about 10-15 per cent across various categories,” Mr Sivakumar said.

Source: The Hindu Business Line