IT Spending by Indian Banking and Securities Firms to Touch Rs 462 Billion in 2014: Gartner

Computerworld October 21, 2013
IT Spending by Indian Banking and Securities Firms to Touch Rs 462 Billion in 2014: Gartner

The research firm attributes this 9.8 percent growth over the previous year to the continued expansion strategy followed by banks.

In 2014, Indian banking and securities companies will spend Rs. 462 billion on IT products and services, an increase of nearly 9.8 percent since 2013, according to a report by research firm Gartner.

“The expansion of the bank’s network, and increasing market share focus, remain a top priority for banks in India. In practice, across all emerging markets, banks tend to exploit the front office over the back office in their investment,” said Vittorio D’Orazio, research director at Gartner.

“However, this strategy – triggered by their expansion over a large unbanked territory – creates a gap which already starts to attract investments on back-office areas. In particular, we continue to see a number of requests from Indian banks regarding the modernization and legacy replacement of core banking systems, while IT spending for tablets although very tiny, is on pace to grow 351 percent this year and will double in the next two.”

The report titled, “Forecast: Enterprise IT Spending for the Banking and Securities Market, Worldwide, 2011-2017, 3Q13 Update,”  states that this forecast includes spending by financial institutions on internal IT services (including personnel), IT services, software, data center technologies, devices and telecom services.

Gartner asserts that the continuous focus on the financial services sector by IT services providers will see IT services become the largest segment in overall spending – Rs. 149 billion in 2014, a growth of 14.5 percent over 2013 - in the banking and securities market.

The analyst firm expects software to be the fastest growing segment, with it registering a 15.2 percent growth in 2014. In the software segment, enterprise resource planning (ERP)/supply chain management (SCM)/customer relationship management (CRM) will exceed the 20 percent growth landmark at 21.5 percent, while desktop software follows at 19.3 percent.

Internal services (that includes IT personnel) is projected to grow at 14.3 percent in 2014, largely due to the expansion strategies of banks across the country, especially in rural areas.