Banking, Securities Cos' IT Spends to Rise 15 Per cent to Rs 53,600 Crore

Mumbai, May 19 (PTI) IT spends by domestic banking and securities companies may grow by 15 per cent to Rs 53,600 crore this year and rise further on expectations of more companies using RBI's 'on-tap' bank licensing, global technology consultancy Gartner said today.

Banking, Securities Cos' IT Spends to Rise 15 Per cent

"The domestic banking and securities companies will spend Rs 53,600 crore on IT products and services in 2015, an increase of 15 per cent over 2014 spend of Rs 46,600 crore," it said in a statement.

The forecast on spends includes internal IT (largely personnel), hardware, software, external IT services and telecommunications, it added.

IT services will witness the largest spending at Rs 18,300 crore, which confirms the banking industry's interest for information technology, its research director Vittorio D'Orazio said.

On the growth front, software spending will have the maximum growth at 19.2 per cent, it said.

Growth in IT spending is slated to continue into next year as well, it said, making an apparent reference to RBI's announcement of moving new bank licensing "on tap" and added that 2015 will be a "turning point."

"India might see up to six new banks set up by the end of 2016 and up to 50 by 2020," it added. The entry of new players will intensify competition and banks will invest more in technology to win market share and drive expansion, he said.

"Specifically, we expect an increase in IT spending correlated to branch technology, inclusive of core banking systems, and in the mobile channel space," D'Orazio said.

The Reserve Bank last year granted in-principle nod to micro-lender Bandhan and infra lender IDFC to enter universal banking fray.

The central bank is also going over applications of over 75 entities which have evinced interest to set-up payments banks and small finance banks, which are slated to be very IT-intensive. 

PTI

Read more about: banking, securities
Story first published: Tuesday, May 19, 2015, 16:35 [IST]
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