Infotech Lead Asia: Indian banking & securities firms will increase IT spend by 12 percent to INR 416 billion in 2013.
IT spent by Indian banking & securities companies in 2012 was INR 370 billion, according to Gartner.
This forecast includes spending by financial institutions on internal IT (including personnel), hardware, software, external IT services and telecommunications.
Telecommunications remains the largest overall spending category at INR 122 billion in 2013. Due to a strong focus on the financial services sector by IT services providers, it is growing strongly and is forecast to overtake telecommunications in total size in 2014.
Software spent will grow at more than 18 percent in 2013.
Growth of desktop software will be 23.6 percent.
Gartner also predicts 22.6 percent growth 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,” said Vittorio D’Orazio, research director at Gartner. “As in other emerging markets, the front office gets preference over the back office in major investments.”
Modernization and legacy replacement remain major issues for many banks as the gap widens between front-office and back-office services. The research agency sees increasing adoption of packages, especially for ‘lite’ core banking systems to address modernization and replacement.
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Meanwhile, Indian insurance companies will spend 101 billion rupees on IT products and services in 2013, up more than 9 percent over 2012 revenue of 92.5 billion rupees. According to Gartner, this forecast includes spending by insurers on internal IT (including personnel), hardware, software, external IT services and telecom.