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HCLTech’s Expanding KYC Journey: From Technology Provider to Trusted Compliance Partner

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HCLTech’s expanded capabilities, new geographies and deeper client impact prove that a successful use case can be just the beginning

Use cases in the IT services space can bring technology to life. Everyone loves a good story. And following up on a successful use case to see what happened two years on doesn’t happen often enough. In fall 2023, TBR discussed with HCLTech the details of a know-your-customer (KYC) solution HCLTech developed for a European bank, and TBR highlighted the possibilities this solution unlocked. Almost two years later, TBR heard “the rest of the story” and gained additional insights into HCLTech’s growing portfolio of KYC solutions.

In a meeting with TBR, Subrahmanyam Umashankar (Uma) and Gourav Dilip Sontakke from HCLTech’s Financial Crimes Prevention practice discussed the recent updates on the engagement with the European bank to implement the KYC solution, which we originally discussed in 2023. The solution has been used in more than 40 countries and has evolved from accelerating and strengthening periodic reviews to powering autonomous KYC journeys, such as onboarding and event-driven reviews.

As anticipated, success in the KYC program with the European bank springboarded HCLTech into KYC opportunities with multiple other European banks, as well as an Australian bank. Uma and Gourav noted that HCLTech shifted from squad-based pricing to outcome-based service models and developed deeper engagement with client teams to better understand their specific processes and pain points. Leveraging the power of their AI-intrinsic design, HCLTech implemented a centralized digital KYC policy, purpose-built KYC workflows and customer-tailored notifications, with additional capabilities such as digital verification, intelligent document processing and a customer self-service portal on the road map. In short, success.

By evolving its KYC offerings across platforms and clients, HCLTech shifted from tech implementer to outcomes-driven partner

As HCLTech extended the KYC offering with additional banks, the company adjusted to different core platforms (such as Pega and Fenego) and shifted from traditional resource-based pricing to outcome-based service models, showcasing its confidence in delivering tangible results. HCLTech’s approach emphasized not only technological implementation but also a holistic reimagining of KYC processes, avoiding simply “lifting and shifting” existing inefficient systems. True to HCLTech’s DNA, Gourav noted that HCLTech brought core engineering capabilities to bear, allowing the company to be both flexible and innovative with clients, particularly when addressing average handling time, the most common metric (and pain point) in KYC.

A few additional points, from TBR’s perspective:

  • Uma commented that implementing multiple KYC solutions on different platforms has accelerated HCLTech’s skills on those platforms and extended the company’s domain expertise: “It has helped us strengthen our practice team in financial crime compliance.” Having clients essentially fund HCLTech’s training and delivery experience benefits HCLTech in multiple ways.
  • TBR previously noted that HCLTech worked alongside Big Four firms as they advised banks on financial crimes and other risk issues, with HCLTech profitably (and smartly) staying in its own swim lane, a strategy not every IT services company executes successfully. Uma confirmed that as HCLTech brought the KYC solution to additional clients, the company continued to work alongside Big Four firms, although with an important shift over the last couple of years. Banking clients, recognizing the success of the KYC solution with the European bank, now seek HCLTech’s “outside-in” view of broader KYC, financial crimes and compliance, offered in tandem with a Big Four firm’s perspective.
  • Multiple times during the discussion, Uma and Gourav delved into the intricacies of measuring success around KYC, from the perspective of the bank and its clients. In contrast, two years ago, HCLTech’s story mostly centered on the technology and how the company could quickly, securely and effectively implement a technology solution. Success, in part, has shifted the goals for HCLTech from delivering technology to delivering outcomes.

If HCLTech continues successfully expanding its KYC clients and extends further into consulting around financial crimes and compliance, the company will likely begin attracting more attention from both technology product companies looking for aggressive and growing alliance partners and India-centric peers already well-established in the financial services space. In TBR’s estimations*, HCLTech’s financial services revenue represents about 20% of the company’s overall IT services revenue, a share that has remained relatively constant over the last three years.

Peers such as Infosys (28%), Tata Consultancy Services (31%) and Wipro (32%) earn a considerably larger share of their revenues in that industry, arguably exposing them to greater risks if and when financial services revenue growth slows. Competitive threats aside, TBR believes HCLTech’s investment and subsequent success in the KYC space, as well as partnering — or at least collaborating — with Big Four firms, bode well for the company’s overall performance. As financial crime evolves, HCLTech’s AI-intrinsic design and autonomous KYC capabilities position it to lead in a space where banks and regulators are never going away. It is just a question of who stops them, serves them and answers to them.

 

*TBR uses its own taxonomy to estimate revenues of 17 IT services companies across seven industries. Start your TBR Insight Center™ free trial today to access this client-only proprietary data.