Information technology research and advisory company, Gartner Inc, today said that Indian banking and securities companies are expected to spend Rs 41,600 crore on IT products and services in 2013, an increase of more than 12% over 2012 revenue of Rs 37,000 crore.
This forecast includes spending by financial institutions on internal IT (including personnel), hardware, software, external IT services and telecommunications.
While telecommuications remains the largest overall spending category at Rs 12,200 crore in 2013, Gartner said, due to a strong focus on the financial services sector by IT services providers, it was growing strongly and was forecast to overtake telecommunications in total size in 2014.
Software, however, is forecast to achieve the highest growth rate among the top level IT spending categories --- to exceed 18% in 2013, with growth of 23.6% predicted for desktop software and 22.6% for enterprise resource planning (ERP)/supply chain management (SCM)/customer relationship management (CRM), with CRM and other front-office applications high on the agenda.
“Most banks see expansion and increasing market share as their main priority. As in other emerging markets, the front office gets preference over the back office in major investments,” Vittorio D’Orazio, research director at Gartner, said in a release on Tuesday.
Orazio said that modernisation and legacy replacement remained 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,” he added.
