IT spending of Indian BFSI to touch $2.7 billion by 2013 |
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By Yuga Chaudhari, Principal Correspondent
19 Feb 2010 | SearchCIO.in |
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According to IT analyst firm Springboard Research's latest report, the
banking, financial services and insurance (BFSI) IT services market in
India is expected to boost its IT
spending from US$1.6 billion in 2009 to US$2.7 billion in 2013,
growing at a compound annual growth rate (CAGR) of 14.2%. Cutting edge
competition and business expansion has been key enablers for technology
adoption in this sector. "Although the Indian banking industry has not
been severely affected due to the economic turmoil, it made them change
their go-to-market strategy. The industry is going through a
transformation and is becoming lot more market driven," says Sanchit
Vir Gogia, the senior research analyst of Springboard research.
Gogia observes some of the key IT
spending trends in the Indian BFSI sector...
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during 2010.
• There is a great rush to step up customer service
levels and companies in the Indian BFSI space. The move to rev up IT
spending on CRM solutions and customer focused technology is driven
by the increasing need to maintain and enhance customer relationships.
• Business Intelligence (BI) is yet another key IT
spending priority for BFSI enterprises. BI helps BFSI organizations
to identify and capture potential customers. Organizations in India are
also using high-end analytics to identify fraud and money laundering.
Springboard feels that BI and anti-money Laundering (AML) solutions
will be significant IT spending drivers in the Indian BFSI marketplace
over the next three years.
• Many Indian banks have already purchased AML
solutions, and others now plan focus their IT spending plans on such
tools during 2010. A key challenge for these banks will be the
successful integration of these solutions with existing databases.
Private banks are the leaders in adoption of AML solutions; however,
it's the foreign banks that lead the adoption curve in India – they
already have an AML solution from their global headquarters.
• Insurance firms are also focusing their IT spending
agendas on BI and CRM tools. These tools help insurance firms to check
customer behavior, investment and spending patterns. A lot of IT
spending is already being witnessed in India on this front.
• Green IT is one of the topmost IT spending
priorities for CIOs in banking and finance. Indian BFSI enterprises now
benefit from the green consolidation of storage, server, and data
center-based applications. However, the primary reason of adoption
continues to be cost benefits -- not the social cause attached to it.
• Banking is definitely going rural. After taking
over the metro markets, the private banks are now moving to Tier I and
Tier II cities. Core banking solutions (CBS) still remain the top IT
spending priority on this front. More investments are now being seen on
CBS and automation of various processes within the bank.
• Business continuity is one of the key concerns for
most banking players in India. Due to this, companies are now utilizing
their IT spending for disaster recovery and business continuity
solutions.
• Collaboration tools are largely getting adopted
within the Indian BFSI industry. Unified communications will be an
emerging technology within this sector that would help in communication
– national as well as international.
• Managed services are becoming popular within
co-operative banks. These services include banks outsourcing their
servers, networks, and security management services. It will gain
momentum in tier I and II cities.
• Mobile banking is attracting a lot of traction in
India. This is where IT spending will happen, especially in the
information security space. As far as information security is
concerned, data loss prevention is an important part of the security
landscape, since it provides end to end prevention. A large number of
banks will look at adopting this technology.
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