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IT spending for Indian banking and securities firms to grow 9.8 percent in 2014

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Harmeet
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MUMBAI, INDIA: Indian banking and securities companies will spend Rs. 462 billion on IT products and services in 2014, an increase of nearly 9.8 percent over 2013 revenue of Rs. 421 billion, according to Gartner Inc.

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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 Rs. 149 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 percent compared to 2013.

Software is expected to be the fastest growing segment, with 15.2 percent growth in 2014. In the software segment, enterprise resource planning (ERP)/supply chain management (SCM)/customer relationship management (CRM) will exceed the 20 percent growth landmark at 21.5 percent, while desktop software follows at 19.3 percent.

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Internal services (that includes IT personnel) is projected to be the third-fastest growing segment at 14.3 percent 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 at 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 percent this year and will double in the next two."