IT Spending for Indian Financial Services Industry to Reach US$6.7 Billion in 2012

by CFO Innovation Asia Staff, 11 June 2012

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customer relationship management financial services IT spending telecommunications

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The Indian financial services industry (FSI) will spend 377 billion (US$6.7 billion) rupees on IT products and services in 2012, an increase of 17.4 percent over 2011 revenue of 321 billion rupees ($5 billion), according to Gartner, Inc.

This forecast includes spending by insurers on internal IT (including personnel), hardware, software, external IT services and telecommunications.

Telecommunications equipment and services represents the biggest spending category, and it is forecast to reach 131 billion rupees ($2.3 billion) in 2012, up from 113 billion ($2 billion) in 2011.

However, spending on software is expected to grow the fastest in 2012, with revenue totaling 34 billion rupees ($613 million) in 2012, up 28 percent from 2011 revenue of nearly 27 billion ($487 million). Gartner says this is being driven by a very high growth in enterprise software applications such as financial and administration packages, and customer relationship management.

“The real spend drivers will be the Indian retail bankers, although all financial services sectors including insurance and securities are increasing IT spend as they build out their infrastructures, “ says Derry Finkeldey, principal research analyst at Gartner.

Finkeldey notes that mobile is currently top of mind for CIOs, and enterprise spend on devices is increasing and expected to grow by nearly 50 percent in 2012. There is also a corresponding growth in mobile network services, of nearly 30 percent.

“This focus on mobility is a global trend, but particularly pertinent to Indian FSIs,” says Finkeldey. “They are all focused on leveraging the high mobile penetration to bring banking services to a wider audience.”

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