Indian banking and securities IT spending will grow 9% in 2020: Gartner

India’s banking and securities sector continues to increase its investments in digital business, with IT spends estimated to grow USD 11 billion in 2020, an increase of 9.1 percent from 2019, according to Gartner, Inc.

Banking and securities organizations are investing in emerging digital technologies such as artificial intelligence (AI) and blockchain, not only to create new product offerings but also to respond to evolving customer demands.

“As an example, the transition to a cashless society aided by newer digital payment channels is creating opportunities for new digital technology investments in the sector,” said Ali Merji, senior research director at Gartner.

Respondents to the 2019 global Gartner CIO Survey identified AI and Machine Learning as the number one game-changing technology at 27 percent followed by Data Analytics, including predictive analytics at 20 percent. “CIOs in this sector continue to adopt digital technologies that will improve existing products and services. Technologies such as biometric authentication, machine learning, chatbots are increasingly preferred by CIOs to deliver an enhanced user experience and enable digitalization of the sector,” Merji said.

According to Gartner’s “Hype Cycle for Digital Banking Transformation, 2019,” biometric technology will impact up to 20 percent of banking organizations in the next two to five years. “In India, biometric technology adoption saw a boost after the introduction of Aadhaar, a unique 12-digit identification number that links citizens’ bank accounts to their biometric data and mobile numbers,” added Merji.

According to the 2019 Gartner CIO Survey, technology leaders in banking place a higher priority on legacy modernization than do technology leaders in other industries. While user-facing digitalization efforts are critical to delivering a complete digital experience to customers, digitalization of internal processes is necessary to support this initiative. Gartner says that of the total technology investments being made in the Indian banking sector, 23 percent are for digitalization of internal services. This investment is expected to grow by 9 percent over the next two years.