IT spend of Indian FSI to hit Rs. 377 bn in 2012

MUMBAI, INDIA: The Indian financial services industry (FSI) will spend Rs. 377 billion on IT products and services in 2012, an increase of 17.4 per cent over 2011 revenue of Rs. 321 billion rupees, according to Gartner, Inc.

This forecast includes spending by insurers on internal IT (including personnel), hardware, software, external IT services and telecommunications, said the IT research firm.

Telecommunications equipment and services represents the biggest spending category, and it is forecast to reach Rs. 131 billion in 2012, up from Rs. 113 billion in 2011.

However, spending on software is expected to grow the fastest in 2012, with revenue totaling Rs. 34 billion in 2012, up 28 per cent from 2011 revenue of nearly Rs. 27 billion. This is being driven by a very high growth in enterprise software applications such as financial and administration packages, and customer relationship management.

“The real spend drivers will be the Indian retail bankers, although all financial services sectors including insurance and securities are increasing IT spend as they build out their infrastructures,” said Derry Finkeldey, principal research analyst at Gartner.

“Mobile is really top of mind for CIOs currently, and enterprise spend on devices is increasing and expected to grow by nearly 50 per cent in 2012. There is also a corresponding growth in mobile network services, of nearly 30 per cent,” she added.

This focus on mobility is a global trend, but particularly pertinent to Indian FSIs. They are all focused on leveraging the high mobile penetration to bring banking services to a wider audience, concluded Finkeldey.