Indian banking and securities companies will spend 416 billion Indian rupees (US$7.7 billion) on IT products and services this year, an increase of more than 12 percent compared to the 2012 revenue of 370 billion Indian rupees (US$6.88 billion), according to Gartner. This forecast includes spending by financial institutions on internal IT (including personnel), hardware, software, external IT services, and telecommunications.
Telecommunications remains the largest overall spending category, at 122 billion Indian rupees (US$2.27 billion) in 2013. Due to a strong focus on the financial services sector by IT services providers, this segment is growing strongly and is forecasted to overtake telecommunications in 2014, Gartner said.
However, software is projected to achieve the highest growth rate among top-level IT spending categories, exceeding 18 percent with growth rates of 23.6 percent in desktop software and 22.6 percent in enterprise resource planning (ERP)/supply chain management (SCM)/customer relationship management (CRM). CRM and other front-office applications are high on the agenda.
"Most banks see expansion and increasing market share as their main priority," said Vittorio D'Orazio, research director at Gartner. "As in other emerging markets, the front-office gets preference over the back-office in major investments," he added.
"Modernization and legacy replacement remain major issues for many banks as the gap widens between front-office and back-office services. We see increasing adoption of packages, especially for "lite" core banking systems, to address modernization and replacement," D'Orazio said.