New Delhi, November 16th : .US and European banks and financial service firms are looking to increase or maintain their IT spending intensity while they seek technology-first and digital-first operating and business models.
Rising online penetrating, competition from fintechs, big tech, and a regulatory push are catalysts for compressed transformation.The catalysts to accelerate transformation are rising online penetration, the competition from fintechs and big tech as well as regulatory pressure.Investment is across leaders and laggards.There are leaders and losers in investment.
The journey is not a short one and provides plenty of opportunities for Indian IT.Indian IT has many opportunities and the journey isn’t easy.Both Tier 1 and mid-tier will benefit, Kotak Institutional Equities said in a report.Kotak Institutional Equities stated in a report that both Tier 1 as well as the mid-tier would benefit. Commentary by BFS firms on IT spends in the Sep-21 quarter is similar to that in the previous quarters.BFS firms’ comments on IT spending in Sep-21 quarter are similar to those of the preceding quarters.
A similar outlook has been shared by a newer set of players indicating that the trend is broad based.Newer players have echoed the same outlook, indicating that this trend is wide-based.
Accelerated investments in cloud and digital will continue in the near term and beyond making 2022E a strong year of IT spending.In the short term, investments will be accelerated in digital and cloud.
This makes 2022E an important year for IT spending.
Offshore players will benefit from the accelerated investments even if companies intend to maintain or reduce the level of technology spending in 2022.
Even if technology companies plan to reduce or maintain their spending levels in 2022, offshore players will still benefit from the increased investments.
Drivers for outsourcing to Indian IT remain quite favourable both from a demand (shortage of skilled talent, legacy headcount, time to market pressure and cost pressures) and supply perspective (availability of skilled talent at scale, cost advantage, leadership in digital competencies, proven execution capabilities and global delivery model).
Both from the demand perspective (shortage in skilled talent, legacy headscount, time pressure, and cost pressures), and the supply perspective (availability at scale of skilled talent, cost advantage and leadership in digital competencies and proven execution capabilities) Indian IT outsourcing drivers remain very favorable.We expect higher outsourcing to be a driver of growth for Indian IT in the next 2-3 years, the report said.
The report stated that we expect greater outsourcing to drive growth in Indian IT over the next two-three years.
BFS firms are increasingly competing with fintechs and even with big tech.
BFS companies are competing more with fintechs than with large tech firms.Fintechs are rising in prominence and are receiving huge investments fueling strong market adoption.
The prominence of fintechs is increasing and they are getting large investments, which has fueled strong market adoption.They both compete and collaborate with BFS firms.
Both compete with and work in collaboration with BFS companies.At the same time big tech wants to own the customer experience and is vying to be at the front end for customers.
Big tech is also keen to control the customer experience, and wants to compete with BFS firms.These trends together with higher digital penetration post Covid are putting pressure on BFS firms to undergo transformation in a compressed time frame.
BFS companies are under pressure to transform quickly due to these trends and higher digital penetration after Covid.
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