Indian banking and securities companies will spend Rs462 billion on IT products and services in 2014, an increase of nearly 9.8% over 2013 revenue of Rs421 billion, according to Gartner, Inc. This forecast includes spending by financial institutions on internal IT services (including personnel), IT services, software, data center technologies, devices and telecom services.
IT services will be the largest segment in overall spending in the banking and securities market at Rs149 billion in 2014, due to the continuous focus on the financial services sector by IT services providers, and it forecast to grow at the second-fastest growth rate at 14.5% compared to 2013.
Software is expected to be the fastest growing segment, with 15.2% growth in 2014. In the software segment, enterprise resource planning (ERP)/supply chain management (SCM)/customer relationship management (CRM) will exceed the 20% growth landmark at 21.5%, while desktop software follows at 19.3%.
Internal services (that includes IT personnel) is projected to be the third-fastest growing segment at 14.3% in 2014, largely due to the expansion strategies of banks across the country, especially in rural areas.
“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 investments,” said Vittorio D’Orazio, Research Director, 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% this year and will double in the next two.”
Further information on IT spending in the banking sector is available in the Gartner report, “Forecast: Enterprise IT Spending for the Banking and Securities Market, Worldwide, 2011-2017, 3Q13 Update” at http://www.gartner.com/document/2601518. This vertical industries forecast provides total enterprise IT spending, including internal spending and multiple lines of detail for spending on hardware, software, IT services, and telecommunications for vertical industries and 43 countries within seven geographies.
