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Indian banks will spend big on IT in 2013: Gartner

By Eleanor Reader

Indian banking and securities firms will spend US$7.7 billion on IT products and services in 2013, according to Gartner.

This is a rise of 12 per cent compared to spending of US$6.88 billion in 2012.

“Most banks see expansion and increasing market share as their main priority,” said Vittorio D’Orazio, research director at Gartner.

“As in other emerging markets, the front-office gets preference over the back-office in major investments.”

The forecast includes spending by financial institutions on internal IT (including personnel), hardware, software, external IT services and telecommunications.

While telecommunications remains the largest IT spending category at US$2.27 billion, software is forecasted to achieve the highest growth rate among top-level IT spending categories.

Software spending is expected to increase to 18 per cent in 2013, with growth of 23.6 per cent predicted for desktop software and 22.6 per cent for enterprise resource planning (ERP)/supply chain management (SCM)/customer relationship management (CRM), with CRM and other front-office applications high on the agenda.

“Modernisation and legacy replacement remain major issues for many banks as the gap widens between front-office and back-office services. We see increasing adoption of packages, especially ‘lite’ core banking systems to address modernisation and replacement,” said D’Orazio.

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