ERP, CRM spends to cross 20 pc uptick at banks: Gartner

MUMBAI, INDIA: Indian banking and securities companies will spend around 417 billion rupees on IT products and services in 2013, an increase of more than 13 per cent over 2012 revenue of 369 billion rupees, 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 category at 131 billion rupees in 2013, due to a strong focus on the financial services sector by IT services providers, it is growing stronger than other segments at nearly 18 per cent compared to 2012.

Software is the second fastest growth segment, in spending on pace to increase 17.1 per cent, followed by internal services (that includes IT personnel) at 15.7 per cent. In the software segment, desktop software and enterprise resource planning (ERP)/supply chain management (SCM)/customer relationship management (CRM) will exceed the 20 per cent growth landmark with 22.1 per cent and 21.7 per cent, respectively.

"Focus on expansion and increasing market share remains a top priority for banks in India. As in other emerging markets, the front office gets preference over the back office in major investments," said Vittorio D'Orazio, research director at Gartner. "Although we have seen a number of requests from Indian banks regarding the modernization and legacy replacement of core banking systems, the major issue for many of those banks is still the gap between front-office and back-office services. This explains the growth rate for 2013 in the vertical specific software segment at 17.3 per cent. We also see increasing adoption of packages, especially for ‘lite' core banking systems to address modernization and replacement."