TCS unearths transformation opportunities in life and pensions with two big deals

We’ve seen a slowdown in providers winning large-scale transformation deals thanks to the macroeconomic slowdown and transformation fatigue. Despite this, TCS recently announced two big deal wins in the life and pensions market: Nest and Standard Life DAC. These deals go beyond consumer-centric banking and insurance domains, where HFS has seen the most historic transformation efforts. Instead, TCS is looking toward pockets of financial services left largely untouched for decades.

HFS believes that areas like life and pensions are fertile ground for digital transformation. Service providers are looking for new revenue opportunities, and it’s time for enterprises to find a partner to help make their aspirations a reality.

New deals with Nest and Standard Life DAC see TCS leverage TCS BaNCS to drive transformation

HFS has written about TCS’ ability to help retail banks become “future-ready,” thanks to its size, scale, and extensive catalog of IP and products. You can read more about its banking-related capabilities in our recent HFS Horizons: The Best Service Providers for Retail Banks, 2023 report. TCS’ products and platforms business, where its BaNCS portfolio sits, is an integrated business unit within its services business; this structure allows TCS to leverage products such as BaNCS as an in-road to transformation.

It’s worth noting that Infosys also boasts its Finacle banking suite, but Infosys manages it as a separate business with its salesforce. The synergy is there, but it’s perhaps more direct within TCS. TCS BaNCS was the driving force behind TCS winning deals with Nest and Standard Life DAC, ultimately helping the provider post double-digit BFSI revenue growth in its latest earnings announcement.

TCS’ latest deal with Nest is built on a 10-year relationship

Nest is the UK’s largest workplace pension scheme. Its relationship with TCS dates back to 2011, when Nest began transforming its core to create a customer experience-driven scalable offering. More recently, Nest and TCS announced a 10-year deal that will see TCS transform Nest’s administration services. The transformation involves leveraging TCS BaNCS, TCS’ suite of banking and insurance (TCS BaNCS for Insurance) solutions, allowing Nest to easily integrate with an ecosystem of partners through APIs to improve its overall offering. Nest will also be able to deliver more personalized customer experiences with an omnichannel platform.

The Standard Life DAC deal is built on TCS’ long relationship with the Phoenix Group

Standard Life DAC is a life assurance, pensions, and savings firm. Standard Life is also a subsidiary of the Phoenix Group, with which TCS has a long relationship. In fact, in February 2023, TCS announced it would transform Phoenix Group subsidiary ReAssure with TCS BaNCS, demonstrating the strength of the relationship. The latest agreement, announced in June 2023, will see TCS establish a customer operations center in Germany for Standard Life. It will also leverage its TCS Digital Platform for Life and Pensions, part of the TCS BaNCS ecosystem, in the German and Austrian markets, migrating around 400,000 policies to the platform.

The two deals prove TCS’ capabilities beyond traditional BFSI modernization and come at a time when big deals are hard to find

In addition, these two deal wins come when many enterprises are tightening their belts thanks to the difficult economic environment, having a knock-on effect on service providers. In our most recent quarterly data viewpoint outlining the revenue performance of the leading India-heritage service providers, we highlighted a continued revenue growth slowdown across the board for the leading providers. However, TCS reported 6.6% YoY growth, the second highest of the group, driven partly by a positive performance in its strong BFSI business, to which these deals contributed.

The Bottom Line: If you operate beyond the traditional realms of BFSI and have genuine transformation aspirations, it’s time to find a partner.

In this case, TCS is proving that there are transformation opportunities beyond traditional consumer-centric banking and insurance domains, such as life and pensions. Enterprises operating in these sectors should actively seek a partner to navigate these opportunities, and now is the right time to do it. Against a backdrop of slowing growth among service providers of all shapes and sizes, the prospect of a significant transformation deal is exciting for service providers. Still, larger providers with solid balance sheets can typically deliver them effectively, thanks to the need for careful financial engineering around clients’ existing captive IT centers. Ultimately, this gives enterprises greater bargaining power to establish new relationships with big service providers or extend new ones—so they should act now.