First among equals

Mumbai, Aug. 31: Britain’s Financial Services Authority is set to outsource some of its market surveillance work to India after signing a new IT contract with Cognizant, one of the nation’s biggest software companies.

Under the terms of the deal, the first that Cognizant has won in Britain’s public sector, the Chennai-based company will develop and manage a critical piece of software used by the FSA for its surveillance activities, which include the detection of fraud and identification of suspicious trading of shares, bonds and commodities.

Tony Virdi, vice-president of Cognizant’s banking and financial services practice in the UK, said the company would assist the FSA in the collection and analysis of post-trade data that firms were required to submit to the regulator every working day. It will also help to generate daily transaction reports that are passed to European regulators.

He said the information would then be used by the FSA and other regulators “to take on further investigations based on any discrepancies”.

“As a result, it is imperative that the market surveillance application performs optimally and at near-zero downtime levels,” he said.

Virdi said the FSA had awarded the contract to Cognizant for three years as part of a cost-cutting drive designed to boost efficiency.

Cognizant, which is listed on the US Nasdaq index but has 75 per cent of its 100,000 employees in India, has also qualified, along with two European software suppliers, Capgemini and Steria, to bid for other outsourced work from the FSA, including supervisory analysis and risk-management work.

The Indian company, which recently outstripped Wipro as the country’s third-biggest technology concern, is expected to retain the work after a shake-up of Britain’s financial regulatory system, which will result in the abolition of the FSA next year. It will be replaced by the Prudential Regulatory Authority — a part of the Bank of England — and the Financial Conduct Authority, a new government agency.

The FSA hopes the arrangement will help it trim costs and boost efficiency.