India’s BFSI (Banking, Financial Services, and Insurance) sector is slowly changing the very foundation of traditional IT outsourcing. Global financial giants are increasingly turning to their in-house global capability centres (GCCs) to handle work that was once the stronghold of Indian IT service providers.
BFSI GCCs are increasingly bringing in-house many critical and strategic technology functions. This shift is particularly evident in areas such as regulatory compliance, where firms are developing tailored regtech solutions to meet evolving global standards, cybersecurity, to ensure tighter control over sensitive financial data and core system modernisation, aimed at upgrading legacy infrastructure.
Additionally, capabilities like AI and machine learning for fraud detection, advanced risk modelling, data governance and analytics are now being developed and managed within GCCs.
As per reports, AI & ML is projected to become the fastest-growing segment in the GCCs in the BFSI market during 2024-2032.
For instance, JP Morgan Chase has deployed its GCC in India to create digital platforms and improve customer services, with a focus on AI and machine learning solutions.
Furthermore, Citi has utilised its GCCs to automate and oversee core banking operations, improving the efficiency of loan approval and transaction processing times.
Outsourcing’s Comfort Zone Is Shrinking
Indian IT majors have reported sluggish growth, layoffs, and a growing struggle to maintain their traditional “pyramid” structure built on junior-level talent.
“The volume and value of ‘run-the-business’ work available for outsourcing is being significantly reduced,” Alouk Kumar, founder and CEO at Inductus Group, a business solutions provider, told AIM.
But it’s not a full stop. Routine, non-strategic tasks, especially those requiring scale or specialised tools, are still outsourced. The nature of the work, however, is changing fast.
Long-term, high-volume contracts for basic IT infrastructure, app maintenance, and routine processing are on the decline. This type of commoditised, low-complexity work which was once the bread and butter for large IT service firms, is being steadily pulled in-house by GCCs.
Talking to AIM, Ashutosh Sharma, VP & research director at Forrester, a research and advisory firm, mentioned that, “Financial services GCCs are in a co-opetition with service providers. These centres are striving to become critical for their HQ by focusing on key capability buildout.”
In an earlier interview with AIM, Bernd Leukert, chief technology, data and innovation officer at Deutsche Bank mentioned that the bank has moved beyond outsourcing and is now developing global technology solutions from India.
For instance, dbLumina, built using Google’s Gemini AI, by Deutsche Bank enhances the creation of client research reports and pitch books by scanning market data, regulatory documents, and company reports to generate high-quality content.
“On an overall basis, they have reduced the demand for service providers. However, they also enhance the overall pie of work that gets done out of the four walls of their HQ,” Sharma added.
Why GCCs Are Gaining Ground
Global financial institutions are increasingly embracing the GCC model for several compelling reasons.
Kumar said that in the wake of the 2008 financial crisis, the regulatory landscape has become more complex, prompting banks and insurers to build in-house regulatory tech tools through their GCCs to better manage compliance with evolving frameworks, such as GDPR, India’s DPDP Act, and the EU’s DORA.
These centres also offer tighter control over sensitive data, quality, and operations; an essential advantage for institutions dealing with confidential financial information. Unlike outsourcing vendors that cater to multiple clients, GCCs are dedicated solely to the parent organisation, enabling a deeper understanding of company-specific risks, internal processes, and long-term strategic goals.
Additionally, India-based GCCs are offering 20–30% higher salaries than traditional IT services firms to attract top-tier talent, while also investing in high-demand areas like data engineering, AI and cybersecurity. This shift reflects a broader push toward innovation and value creation, rather than just cost efficiency.
What Comes Next
While outsourcing isn’t disappearing, it is being reshaped. Traditional IT firms must pivot toward high-value, specialised services to stay relevant.
Namita Adavi, partner at Zinnov, told AIM, that BFSI GCCs are not replacing outsourcing. “They are evolving how global financial institutions structure and scale capability. In fact, BFSI remains one of the largest sectors for outsourcing globally, highlighting the continued importance of service partnerships.”
India is now home to some of the most advanced BFSI GCCs in the world. Firms like JP Morgan Chase, Citibank, HSBC, Standard Chartered, and NatWest Group have built deep capabilities across tech and business operations. These centres are working on everything from AI-driven fraud detection to risk modeling, from data platforms to digital banking.
Yet, even as they build robust in-house functions, these same firms continue to rely on external service partners — especially for large-scale rollouts, integration, or specialised skills.
The evolving role of GCCs includes driving high-value services such as consulting in niche domains, delivering AI and automation solutions, enhancing cybersecurity and cloud integration, and augmenting teams with high-skill talent.
At the same time, their relationship with IT service providers is becoming more nuanced. Vendors often lead early-stage pilots and proof-of-concepts (PoCs) for emerging technologies, but once these are validated, GCCs typically bring the work in-house to retain control and build internal expertise.
Josh Everett, CEO, Zinnia India, a GCC, said that “(GCCs) in India are no longer just part of the outsourcing story, they’re redefining it.” He mentioned that what we are witnessing is the rise of a new innovation epicenter, where global financial institutions are not only tapping into India’s exceptional talent but co-creating the future of financial technology.
At Zinnia, he added, “We’ve built structured internship programs and forged partnerships with leading Indian universities to unlock access to engineering and data science talent from Tier 1 to Tier 3 cities.”
“This is not a case of one model replacing the other. It is a strategic rebalancing,” said Adavi, adding that GCCs are driving innovation and IP ownership, while service providers enable transformation at scale. Together, they form a hybrid model that is more resilient, more agile, and better aligned to enterprise outcomes.
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