Banking, financial services and insurance (BFSI), the biggest sectoral purchaser of Indian technology solutions for decades, is expected to provide the much-needed ballast to a $280-billion industry that has recently struggled to boost its topline in a business climate rocked by AI-induced layoffs, towering tariff hurdles, and potentially inflationary geopolitical challenges.

In this backdrop, Wall Street and London City banks have fared relatively better. With banks and financiers of all description taking to AI, the sector is witnessing an increase in payments modernization, asset servicing, and platform consolidation, boosting the demand for technology inputs.

“The BFSI vertical continues to be a strategic growth driver for Infosys. We’re seeing strong client interest in areas like payments modernization, asset servicing, and platform consolidation, especially as financial institutions look to simplify operations, enhance customer experience while also delivering on new experiences,” says Dennis Gada, executive vice president and global head of BFS at Infosys.

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“The macroeconomic environment is playing a significant role in shaping demand. With ongoing inflationary pressures, interest rate fluctuations, and geopolitical uncertainties, BFSI clients are more focused on balancing innovation with cost efficiency. This is leading to a shift from discretionary digital projects to more integrated cost takeout programs that deliver broader and measurable business outcomes,” adds Dennis.

Currently, the BFSI sector constitutes approximately 30 percent of the overall revenue of the Indian IT services industry, which exceeds $280 billion, according to reports from industry association Nasscom and various analysts.

Being early adopters of technology, this sector is anticipated to allocate the most towards AI/GenAI and transformation, estimating expenditures between $270-290 billion, which accounts for around 35-40%, while healthcare is projected to invest about 25-30 percent by FY26, as indicated by data from the technology platform UnearthInsight.

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Furthermore, the latest financial results from Accenture for the third quarter, covering March to May, suggest that the BFSI sector is maintaining a robust growth trend, having increased by 13 percent compared to the previous year.