IT spending in Indian banking, securities market to reach Rs 42,200 crore

Indian banking and securities companies will spend Rs42,200 crore on IT products and services in 2013, an increase of more than 13 per cent over 2012 revenue of Rs37,300 crore.

This forecast includes spending by financial institutions on internal IT (largely personnel), hardware, software, external IT services and telecommunications, according to a study by Gartner Inc.

IT services is the largest overall spending category at Rs13,200 crore in 2013, which confirms the strong focus on the financial services sector by IT services providers. Many of these are leveraging their prominent position within this domestic market.

Software at about 18 per cent in 2013 is forecast to achieve the highest growth rate amongst the top level IT spending categories.

''The expansion strategy of banks is still paramount in India, as well as in other countries of the APAC region. The Reserve Bank of India is making plans to increase the penetration of banks across the country and even opening up the market to new entrants,'' said Vittorio D'Orazio, research director at Gartner.

''In these cases, the front office technologies for the branch will be very attractive. However, to increase their penetration in India, banks will follow the leverage your customer device trend – or LYCD. This will evolve the relationship between the bank and its customers over the mobile channel without remarkably increasing IT costs. In fact, we see the penetration rates of the smart phone devices in the triple digits range which is by far greater than any branch expansion rate.

''Core banking systems and other back-office technologies will be also affected by this trend as IT legacies are often unable to properly manage this channel,'' he added.