Healthy outlook from US banks is good news for Indian IT
Bengaluru, India – 03rd March, 2020: Large US Banks and analysts have declared that, India’s Information Technology service sector is likely to benefit from enhanced business commentary and a healthy perspective on technology expenses this year.
Large US banks like Citibank, Goldman Sachs, JP Morgan, Wells Fargo and Bank of America have announced they would prolong to spend and invest in technology to develop internal efficiencies and will head new products and services.
“Improvement in US BFS (banking and financial services) revenue environment and stable commentary on IT spends may provide a sustainable setup for Indian IT companies in calendar year 2020,” said Aniket Pande, an analyst at brokerage firm Prabhudas Lilladher. “US banks’ commentary seemed more optimistic compared
to the last three quarters (they) had a good quarter and are more optimistic on revenue environment due to improvement of US China trade discussions and uptick in consumer spending,” he added.
BFSI is the largest revenue generator for India’s IT service sector, with more than a third of its revenue coming from this industry. Worldwide investment on IT by banks is likely to reach 309 billion by 2022 according to 2019 study by researcher Celent. Huge Banks in North America are likely to invest around 120 billion, a growth rate of 4.6 percent from 2019, it said. “Overall BFSI revenues have begun to bounce back for the sector,” analysts Ankur Rudra and Aayush Gupta of JP Morgan said.
BFSI is termed as Banking, Financial Services and Insurance and popular as a business name for organisations that supply a series of such products & services and is commonly used by IT/ITES/BPO organisations and technical or professional services companies that administer data processing, application testing and software expansion activities in this field. Banking sector also comprise with core banking, retail, private, corporate and investment. Financial Services also include mutual funds, stock-broking and payment gateway.
Technology is letting BFSI sector to reach out to better markets and propose novel goods and services through well-organized delivery channels. On the other side, information security and accessibility of information updates is significant to the banking and insurance sector, a compulsion of high network uptime, quick fault detection and rapid problem resolution. The financial and banking sector also encounters challenges posed by the huge number of existing legacy systems in its infrastructure.
According to the analysts, technology investment has been increasing in biggest and topmost regional banks in the US, and this has developed the contribution to incremental revenues and expansion throughout Indian IT industry.