India's BFSI market to reach $2.7 bn in '13

NEW DELHI, INDIA: The Banking, Financial Services and Insurance (BFSI) IT services market in India is expected to grow from $1.6 billion in 2009 to $2.7 billion in 2013, growing at a CAGR of 14.2 per cent, according to Springboard Research, a player in the IT market research industry.

Springboard’s latest report released today, 'The Indian IT Services Market for the Banking, Financial Services and Insurance Vertical', noted that this intensely competitive market remained fragmented between a large number of services providers.

“Although the BFSI vertical in India is maturing in terms of adoption and usage of IT, it continues to be price sensitive. Hard to please Indian CIOs are becoming as demanding as their global counterparts, consistently expecting vendors to offer a fresh approach,” said Sanchit Vir Gogia, senior research analyst for Services at Springboard Research in a press statement. “Now, the key challenge for IT vendors moving forward will be to keep pace with end user demand for rapid innovation,” Gogia added.

Springboard observed that there was a great rush to step-up customer service levels and companies in the BFSI space have been rapidly investing in IT to work towards fulfillment of this objective.

With increasing competitive pressure, it is getting harder for BFSI enterprises to ‘win and keep’ customers. The move to adopt CRM solutions and customer focused technology is driven by the increasing need for maintaining and enhancing customer relationships.

According to the report, Business Intelligence (BI) was yet another key priority for BFSI enterprises which helps identify and capture potential customers. Organizations in India were also using high-end analytics to identify fraud and money laundering, it said.

Given the critical nature of the solution, Springboard believed BI and Anti-Money Laundering (AML) solutions would see significant growth in the Indian BFSI marketplace in the next 2 to 3 years.

Indian BFSI enterprises are benefiting from the 'green' consolidation of storage, server, and data center-based applications. However, the primary reason of adoption continues to be ‘cost-benefit’ and not the ‘social cause’ attached to it.

Also, CIOs no longer felt insecure with the hosting approach and realize the cost related benefits of dedicated hosting over a resource sharing approach, the report said.

Springboard suggested that vendors define a clearly defined and achievable unique selling proposition for in the overall ecosystem.

“The Indian IT Services market for BFSI (and overall) is highly competitive with limited top level differentiation. Vendors must now adopt a BFSI specific template, productize their service offerings to try to maximize the potential for lower price points, delivering improved and sustainable margins,” advised Phil Hassey, vice president for Services at Springboard Research.