New Delhi : Zinnov, a leading globalisation and market expansion advisory firm, today said India’s domestic IT spends is valued at 30.4 billion dollars, out of which Banking Financial Servies and Insurance (BFSI) sector contributes to 11.1 per cent share.
A study titled “IT adoption in BFSI sector in India” covers market conditions and sentiments that drove IT spending in the BFSI sector in FY12 and predictions on the trends moving forward.
The study highlighted the growing maturity of Indian BFSI organisations in IT adoption, as technology is seen as a driver of business value. Technology firms have great potential to explore in the BFSI sector, which is the fast growing in terms of IT investment.
BFSI sector contributes to eight per cent of India’s Gross Domestic Product (GDP).
IT budgets as a per cent of revenues for BFSI is estimated at 1.5 per cent to 2 per cent, regulatory compliance a key driver of IT spend in BFSI vertical is expected to reach 3.5 billion dollars by FY14, growing at a CAGR of 13 per cent.
India is a fast growing IT market and the BFSI vertical contributes to 11.1 per cent of the overall 30.4 billion domestic IT spend, according to the Zinnov report.
Indian firms made the maximum investment in hardware products, with 53 per cent spend set aside for this category, followed by IT services (32 per cent) and software (15 per cent).
The study said domestic banking industry is returning to rapid growth after a slow growth phase during the economic downturn, with aggregate deposits and bank credit demonstrating linear growth. In addition, innovative products and platforms such as virtual debit cards and mobile banking, rapid geographic expansion plans, Centre’s focus on financial inclusion and the entry of foreign banks are spurring renewed investments in India by the BFSI sector.
The Zinnov report found that growing business requirements are driving rapid adoption of IT in the BFSI sector.
According to the study, the key growth drivers include regulatory compliance needs, desire to improve internaland operational efficiencies to better align business processes, support for growth strategies as internet and mobile banking gain focus, enhanced customer experience for competitive differentiation and creation of new business opportunities by extending reach to the unbanked population.