According to Gartner, Indian banking and securities companies are expected to spend Rs 477 billion on IT products and services in 2014, witnessing an increase of 12.7 per cent over 2013. In 2013, the Indian banking and securities companies had spent Rs 423 billion.
This forecast includes spending by financial institutions on internal IT services (including personnel), IT services, software, data centre technologies, devices and telecom services. Further, due to continuous focus on the financial services sector by IT services providers, in 2014, IT services at Rs 149 billion will be the largest segment in overall spending in the banking and securities market. Internal services (that includes IT personnel) is projected to be the fastest growing segment at 21.6 per cent in 2014, largely due to the expansion strategies of banks across the country, particularly in rural areas, which require more personnel on the field. Software is expected to be the second-fastest growing segment, with 19.2 per cent growth in 2014. In the software segment, vertical specific software will emerge as the fastest sub-segment due to core banking system replacements and other back-office consolidation which will witness banks moving away from internally developed software to external packages.
Gartner states that in 2014, banks will continue to focus on expanding their branch network. There will be about 2,000 new branches in India by the end of the year. The modernisation of the back-office, as well as the need to be compliant with international regulations will also drive banking and financial services to make significant investments in the IT sector.
