Gartner today predicted that Indian banking and securities companies’ spend on IT products and services will increase 12.7 percent to 477 billion rupees in 2014 from 423 billion rupees in 2013.
This forecast includes spending by financial institutions on internal IT services (including personnel), IT services, software, data center technologies, devices and telecom services.
Gartner said IT services will be the largest segment in overall spending in the banking and securities market at 149 billion rupees in 2014, due to the continuous focus on the financial services sector by IT services providers. The IT services segment is forecast to increase at the third-fastest growth rate at 15.3 percent compared to 2013.
Internal services (that includes IT personnel) is projected to be the fastest growing segment at 21.6 percent in 2014, largely due to the expansion strategies of banks across the country, especially in rural areas, which require more personnel on the field.
Software is expected to be the second-fastest growing segment, with 19.2 percent growth in 2014. In the software segment, vertical specific software is the fastest sub-segment due to core banking system replacements and other back-office consolidation which will steer banks from internally developed software to external packages.
The growth driver will be the expansion of branch network. There will be about 2,000 new branches in India by the end of this year.
Vittorio D’Orazio, research director at Gartner, said: “The modernization of the back-office, as well as the need to be compliant with international regulations, and increased challenges from new more demanding customers are other trends we see in these markets.”
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