The Banking, Financial Services and Insurance (BFSI) IT Services
market in India is expected to grow from US$1.6 billion in 2009 to
US$2.7 billion in 2013, growing at a CAGR (compound annual growth
rate) of 14.2 percent, says Springboard Research.
“Although the BFSI vertical in India is maturing in terms
of adoption and usage of IT, it continues to be price sensitive.
‘Hard to please’ Indian CIOs are becoming as demanding
as their global counterparts, consistently expecting vendors to
offer a ‘fresh approach’,” said Sanchit Vir
Gogia, Senior Research Analyst for Services at Springboard
Research. “Now, the key challenge for IT vendors moving
forward will be to keep pace with end user demand for rapid
innovation,” Mr. Gogia added.
Springboard observed that there is a ‘great rush’ to
step-up customer service levels and companies in the BFSI space
have been rapidly investing in IT to work towards fulfillment of
this objective. With increasing competitive pressure, it is getting
harder for BFSI enterprises to ‘win and keep’
customers. The move to adopt CRM solutions and customer focused
technology is driven by the increasing need for maintaining and
enhancing customer relationships.
Business Intelligence (BI) is yet another key priority for BFSI
enterprises. Organizations in India are also using high-end
analytics to indentify fraud and money laundering. Given the
critical nature of the solution, Springboard believes BI and
Anti-Money Laundering (AML) solutions will have significant growth
in the Indian BFSI marketplace in the next 2 to 3 years.
Indian BFSI enterprises are benefitting from the
“green” consolidation of storage, server, and
datacenter-based applications. However, the primary reason of
adoption continues to be ‘cost-benefit’ and not the
‘social cause’ attached to it. Also, CIOs no longer
feel insecure with the hosting approach and realize the cost
related benefits of dedicated hosting over a resource sharing
approach.
Springboard suggests that vendors define a clearly defined and
achievable unique selling proposition for in the overall ecosystem.
“The Indian IT Services market for BFSI (and overall) is
highly competitive with limited top level differentiation. Vendors
must now adopt a BFSI specific template, ‘productize’
their service offerings to try to maximize the potential for
lower price points delivering improved and sustainable
margins,” advised Phil Hassey, Vice President for Services at
Springboard Research.
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