HCLTech is supercharging BFSI with service-led platform outsourcing and AI

In 2024, HFS coined Services-as-Software, introducing a bold new dynamic where software technologies and services collide. This created a disruptive paradigm that redefines service delivery—through technology, not human labor. This shift is a natural progression from the inflection point we identified in 2023 when we called for a shift from a labor-centric, linear model to a technology-centric, outcome-driven approach.

BFSI sub-segment innovation divide: Some accelerate, some adapt, and others risk falling behind

At the time of the Services-as-Software evolution, we attended HCLTech’s BFSI Analyst Day at its Bangalore office to assess how its senior BFSI leaders translate strategy into tangible outcomes for clients. Instead of broad vision statements, we focused on the concrete actions HCLTech is taking to address critical industry challenges.

Digital and technology investments are reshaping BFSI, but the impact varies by sub-segment. Payment providers lead with rapid innovation in digital wallets, blockchain, crypto, and real-time payments. Commercial banks focus on digital hygiene, while retail banks push for hyper-personalized products. Insurers, long held back by legacy systems, now prioritize experience-led transformation.

Serving this fragmented industry—spanning large banks, mid-tier players, credit unions, insurers, and reinsurers—requires a balance of deep expertise, execution excellence, and scalable innovation.

HCLTech’s BFSI cloud transformation enables enterprises to move beyond cost savings and drive innovation and agility

Massive disruption in BFSI is shaking up traditional profit pools, competitive advantages, and operating models, forcing firms to double down on long-term cloud strategies. While the cloud’s initial value is centered on cost savings and driven by higher productivity and lower tech unit costs, the real impact emerges when cloud infrastructure fuels business innovation, enabling outcomes such as platform-based operations and API-driven banking.

HCLTech showcased how it helped a leading Australian bank modernize its legacy data systems and accelerate AI adoption. Using automation and AI-driven workflows, it executed a large-scale AWS migration (>30PB data, ~66K jobs). This enabled cost efficiency, regulatory compliance, and a self-service data marketplace, driving innovation through platform-based operations and API-driven banking.

HCLTech brings deep expertise in architecting large-scale cloud transformations—from integrated run-to-retire services to full-scale data center exits. Its tailored cloud approach enables cost savings, ensuring security, compliance, and regulatory alignment, which also drives agility, digital innovation, and advanced analytics at scale. HCLTech is positioning itself as a key player in this transformation, but execution challenges remain.

HCLTech’s service-led product strategy drives impact for wealth management firms

HCLTech acquired Confinale AG in 2022. Now fully absorbed, HCLTech Confinale Wealth Solutions has transitioned from a system integrator to a service-led product provider—a productized service that strengthens its Avaloq and Temenos expertise. The firm is reimagining wealth and private banking by wrapping services around core products to enhance scalability and repeatability. Building on this model, HCLTech is expanding its service-led product approach to accelerate core banking modernization for banks eager to transform and drive SaaS migrations for key product partners such as Salesforce, Guidewire, and Pega. The provider has recently embedded GenAI into corporate actions and is fast-tracking on-prem-to-SaaS transitions, enhancing banking workflows, security, and automation. A case in point is when HCLTech partnered with a Swiss private bank to streamline its Avaloq core banking system. The project’s high-impact outcomes included reducing integration time by 40%, accelerating customer onboarding, enhancing portfolio risk assessments, and, ultimately, enabling faster investment advisory services.

HCLTech expands insurance modernization with policy upgrades, claims automation, and cloud transformation

HCLTech is leveraging its deep legacy estate knowledge and understanding of the technology plumbing of insurers built through years of Guidewire and Zafin implementations to drive more profound modernization. It has developed a greenfield, microservices-based, event-driven architecture capable of processing eight million policies with technology that can be ported across other insurance business lines.

HCLTech supports areas of early focus, such as usage-based insurance. Other notable engagements within claims management are first notice of loss (FNOL) and change detection in homeowners’ policies, which accelerate settlements and reduce the need for lengthy, multiyear transformation projects.

The firm is also exploring formal partnerships with Zafin and Oracle while strengthening its policy modernization expertise in Guidewire’s on-premises and cloud environments. With managed services covering 80–85% of policy modernization, HCLTech is focused on enhancing digital capabilities, ensuring regulatory compliance, and driving agile execution to help insurers modernize faster and wiser.

Securing AI adoption with speed and safety

While AI, particularly machine learning, has long optimized high-potential areas of the back-office value chain for BFSI firms, GenAI has catapulted AI beyond the back office, unlocking new value across the entire enterprise. HCLTech’s full-stack AI propositions fulfill the need for a well-structured roadmap that ensures the path to innovation remains safe, compliant, and explainable.

• AI Force—a platform that uses AI accelerators to augment, accelerate, and improve the quality and efficiency of the SDLC and ITOps.
• AI Foundry—a managed services and SI offering that uses repeatable IP for vertical-specific LLM/SLM.
• AI Engineering and AI Labs—provide structured innovation, but scalability and cost-efficiency remain key challenges.

HCLTech mentioned it has 41 AI use cases in production and more than 130 others in PoC or exploration.

HCLTech demonstrated a client story showcasing a GenAI-powered trade surveillance copilot that delivered measurable efficiency gains for a global financial services provider, improving trade compliance turnaround from weeks to days.

HCLTech is also investing in AI-driven investment insights and sustainable finance, developing tools such as InsightGen and an AI-powered sustainable finance framework.

HCLTech sheds the labor-arbitrage model for BPOs

HCLTech’s BPO 3.0 isn’t just about executing business process outsourcing through people—it’s about transforming BFSI business operations through AI, automation, and managed services. The shift moves beyond traditional labor arbitrage to AI-driven, outcome-based models, where intelligent workflows, digital colleagues, and hyper-automation come to life to scale efficiency and productivity. A standout example is a regional European bank that leveraged Microsoft Copilot and Azure AI to automate chargeback processing, cutting turnaround from five days to same-day and minimizing manual intervention. The massive change in the BPO delivery model has transformed how HCLTech structures its contracts, moving from SLA-driven outsourcing to platform-enabled services that decouple growth from headcount expansion.

However, scaling AI adoption in BPO functions fast enough remains a challenge. The firm is actively working to prevent clients from reverting to legacy cost-cutting tactics that still dominate decision-making.

HCLTech is diving into AI-led financial crime compliance (FCC)

The BFSI industry perpetually demands risk mitigation and regulatory compliance. HCLTech is evolving from an implementer to a strategic FCC partner to enhance compliance operations, integrating AI-driven fraud detection, real-time monitoring, and automated know your customer (KYC) processes. Its investments in NICE Actimize, Socure, and Fenergo align with banks’ shift toward AI-powered FCC platforms.

The Bottom Line: BFSI leaders must ensure that HCLTech’s solutions drive scalable, secure transformation and not just technology adoption to effectively navigate AI, cloud, and compliance challenges.

BFSI enterprises are under immense pressure to modernize core systems, scale AI adoption, and navigate the complexities of cloud transformation—all while ensuring regulatory compliance and cost efficiency. HCLTech is making bold moves in BFSI transformation, embedding AI and automation across banking, insurance, wealth, BPO, and financial crime compliance. Its service-led platform approach positions it beyond traditional outsourcing, helping BFSI firms modernize faster, automate smarter, and scale AI adoption. FS leaders must push for scalable, AI-driven compliance solutions—not just incremental platform upgrades.