Indian IT services outfit Mastek is forming a joint venture company with Carreker to provide payments outsourcing and offshore IT services for US banks.
The new company, Carretek LLC, will be 51% owned by Carreker and 49% by Mastek subsidiary Majesco and will operate from Mumbai in India.
Carretek will initially focus on payments-related business processes and IT services such as custom software development and application management, say the partners. Carretek says it expects to reduce banks’ net costs for outsourced payment processes by 35 to 40 percent, in addition to improving the productivity and quality of the processes.
Subhash Mukerji, president of Carretek and managing director of Carreker corporation, comments: "Our research shows that US banks, facing a decline in cheque volumes, will need to reduce related costs by $1.85 billion over the next four years just to maintain current per item costs. To achieve this level of savings, they must consider offshore processing options and invest in the enabling technology, initially for the savings but ultimately to streamline and improve these processes."
Over the next five years, the top 100 global financial institutions expect to migrate offshore more than $356 billion of operating processes, capturing savings in the range of 39 percent, according to Deloitte Research. AT Kearney estimates that US financial services firms are planning to relocate more than 500,000 jobs offshore in the same timeframe.
Carreker also plans to use Carretek to expand its own production capacity through work on targeted software enhancement and custom development opportunities.