From the Black Forest to Brazil Fever: GFT Sees Profit in Banking

By Filipe Pacheco

GFT is a German company focused on technology services and consultancy for the financial industry. So why would Mr. Ulrich Dietz, global CEO who founded this company in 1987 in the middle of the Black Forest, be so interested in the Brazilian market?  If there is one industry in which Brazil stands out as one of the best models in the world in terms of innovation and professionalism, it is the financial business. Marco Santos, who is the country manager for GFT in Brazil, agrees that local competitors are highly qualified and the industry is well established — but he says there is quite a lot of room to grow for those who offer IT solutions in niches or application areas that are not yet adequately addressed. Mobile banking systems would be one good example.

“Many times, we Brazilians tend to think we are good at something already and there is nothing else to learn,” Santos says. “That is not correct. There are many solutions abroad that can be replicated here.”

Santos has been in the post with GFT since June, and says “but already it feels like it’s been two years.” He previously worked for some technology heavy-hitters: Tata Consultancy Services, CPM Braxis, and Oracle. Among GFT’s clients in Brazil are some of the world’s biggest global banks, like HSBC, Deutsche Bank, and Santander, besides a few of the biggest Brazilian commercial and investment banks (which he prefers not to mention by name). The Brazilian branch of GFT is also responsible for all the support and maintenance and a few innovation projects for Deutsche Bank`s operation in the United States.

In a recent ranking published by Brasscom, the association of IT and communications companies that operate in Brazil, GFT appears as number 10 in the list of the biggest IT exporters in the country.

Mainframe Orientation

Most of the national banks still work with mainframe systems created by their own tech teams, who also handle maintenance and daily operations. But that is a model that has been changing both in Europe and in the United States, Santos says, because it is too expensive otherwise. Banks and brokerages in those regions are tending to switch to standardized platforms that are easier to maintain and also cost less, like SAP models.

GFT, he says, has the experience from working abroad to help Brazilian institutions overhaul their technical environments, customize systems to meet the demands of clients, and be able to offer services, updates, and maintenance sold as services afterwards. “At a certain point, Brazilian banks will have to switch somehow to cheaper models, and we are ready to offer them opportunities that they do not expect,” Santos says.

GFT has already been working with unnamed Brazilian clients (including “one of the biggest national players”) to develop systems for “higher trade frequency,” processing transactions at extremely high speeds without any human intervention. National banks have their own methods for doing this, but they are not yet as efficient as those used in Europe or in the US, Santos says.

Brazil stands as GFT’s hub of operations for the continent, and one of its main exporting centers

Innovation and “Boutique” Style

GFT has its offshore development center in Sorocoba, a city located about an hour away from São Paulo and, from there, it develops applications and sells IT services to its Brazilian clients, to other Latin American countries, and to United States. Its main office is located in Alphaville, much closer to São Paulo. The company has about 170 employees.

Santos explains that, besides being able to deliver the usual kinds of services and products expected from an IT provider — like Internet applications, SAP, Java, and .NET solutions, mainframe adaptations and maintenance and support services — innovation also has to be a top priority for them. Hence, a great part of the company’s work in Brazil is focused on coming up with mobility solutions for financial institutions.

GFT considers itself an “IT and consultancy boutique,” not strictly a service provider or product seller. “We have to deliver more,” he says. Recently, Santos says with apparent pride, GFT had about 100 of its analysts working on a project to realign its internal systems so that it could better provide mobility solutions, like being able to access, with the highest standards of security, a bank account from an iPhone or a tablet of any kind.

The company has developed its own platform that is adaptable to a bank’s operational criteria and can be used to develop services to connect bank systems with mobile devices, like Android, Symbian, or iOS. “That is the kind of service that we develop here and that we export,” he says, “and we are ready to do it on a much broader scale.”

Mobility has been such a big deal for GFT that the company is (along with Ernst & Young, Fujitsu, Deutsche Mess, and Bitkom) sponsoring a contest that will reward with 25,000 euros and a two-year training program the person who comes up with the best mobile application for financial institutions. The winner will be announced at Cebit 2012, one of the biggest IT events in Europe.

Crisis? What Crisis?

Asked how much pressure they feel here in Brazil from a parent company that has its headquarters in one of the regions that is struggling economically nowadays, Santos says that operations in Brazil have not suffered dramatically from the world financial crisis, nor are they being pressured to work more. “Actually, this has been a great year for us, and we expect 2012 to be even better.”

Santos would not say how much GFT Brazil is expected to increase revenue this year. But he said he believes that focusing on the domestic market while also seizing the opportunities to export IT services and solutions, it is possible to achieve better results next year than in this one. “They are complementary things,” he says.

In the first three months of this year, GFT global operations have earned 67.30 million euros in IT services and solutions for the financial industry, 24% more than the year before. Just the services segment that operates from Brazil and Spain was responsible for 28.89 million euros, or about 42% of the total results. For the year 2010, GFT`s global earnings were around 248 million euros.

Meanwhile, Brazil stands as GFT’s hub of operations for the continent, and one of its main exporting centers. Santos indicated no definite plans to expand but confirmed that the company continues to have ambitions hopes for its Brazilian branch.

This article originally appeared in Sourcing Brazil