Banking, financial services sector to spend Rs 49,900 cr on IT: Gartner

In 2014, the banking and securities firms spent Rs 45,500 cr on IT products and services

With the focus on the digital medium and technology by banks and other financial institutions increasing, the spending on information technology (IT) is expected to increase by 9.8 per cent to around Rs 49,900 crore in 2015, according to research firm Gartner. In 2014, the banking and securities companies had spent Rs 45,500 crore on IT products and services.

“Established firms in the industry are investing to strengthen their operational infrastructure to support regulatory needs, as well as sustain increasing demands from the digital channels. Moreover, the Reserve Bank of India has issued licences for 11 payments banks and another 10 small finance bank.

These new entrants will grow the IT market by their own technology investments, and also by stimulating the incumbents to invest in modern technology,” said Rajesh Kandaswamy, research director at Gartner.

For the new niche banks, the reliance on technology will be more as they need to keep costs under check to manage profitability. This expenditure on IT includes spending by financial institutions on internal IT (largely personnel), hardware, software, external IT services and telecommunications.