BFSI sector’s IT spend to touch $2.5bn in 2008

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The banking, financial and insurance sector is expected to invest more than $2.5 billion by December end, in hardware and packaged software, retaining its position as the largest spending vertical for the IT industry. This represents a growth rate of 18.5 per cent over last year's $2.1 billion, according to Skoch Consultancy Services, a leading analyst firm.

 

In the run-up to its 5^th Annual BFSI Summit, Skoch Consultancy Services polled 30 top banking and insurance CEOs to determine the major issues before the industry. The topmost concern of the CEOs polled was outreach for different types of micro-credit activities and servicing the needs of the rural Indian. This, according to 86 per cent of the respondents, was also the biggest stumbling block for scaling up financial inclusion.

 

As the CEOs prioritized their concerns and challenges, about 74 per cent cited the need to target higher revenues. They suggested that revenue would be enhanced through better customer relationship management (CRM), more fee-based income and cross-selling of financial products. Apart from the need to widen outreach, about 42 per cent CEOs said that an integrated last-mile delivery channel for all financial products was very important. In addition, the majority of Insurance CEOs felt that an integrated insurance product, combining life and non-life, was essential for the rural areas. This will provide boost to financial inclusion efforts.

 

"One of the reasons for higher growth rate in applications like CRM, HRM, Business Intelligence and Data Mining is that they are now considered critical for cross selling, avoiding customer churn and differentiating brand and product offerings and knowing your customer better," said Sameer Kochhar, CEO of Skoch Consultancy Services.

 

Keeping these concerns upfront, the CEOs polled by Skoch indicated that IT upgradation would focus on areas like CRM, Human Resources Management (HRM), Business Intelligence and data mining kind of applications and services.

 

Even as the banks and financial institutions try to reach the rural areas and have adopted various financial inclusion measures, it was pointed out that if the last-mile delivery gets IT enabled, interventions can be better and faster implemented. It can also facilitate determination of eligibility of fresh loans.

 

Moving on, they agreed, IT enablement would be critical to wider outreach and better CRM. "We also analysed spending trends," added Sameer Kochhar, "and clearly mobile payments are likely to catch up fast. Biometric and voice-enabled mobile handsets will be extensively used over the next three years." Mobile handsets will be used to offer all kinds of financial services, including financial inclusion initiatives.  The CEOs opined that the appointment of a lead bank in each district as per the recommendations of the Rangarajan Committee on Financial Inclusion was giving good results.

 

The 5^th Skoch BFSI Summit on June 10-11 in Mumbai will see CEOs and CMDs from the banking, financial and insurance sector, policy makers, influencers and consultants on a common platform to deliberate and debate on critical issues, identify thrust areas and formulate strategies for the growth of the sector.

 

Sourced From: Vaishnavi Corporate Communications Pvt Ltd