BFSI sector's IT spend to touch USD 2.5 bn in 2008

Mumbai, June 10 (UNI) The Banking, Financial Services and Insurance (BFSI) sector is expected to invest more than USD 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 USD 2.1 billion, according to Skoch Consultancy Services, a leading analyst firm.

In the run-up to its 5th annual BFSI Summit held here today, the Company has 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. They also considered this as the biggest stumbling block for scaling up financial inclusion.

They also cited the need to target higher revenues and 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, an integrated last-mile delivery channel for all financial products was also considered 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, they said.

Skoch Consultancy Services CEO Sameer Kochhar said that 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.

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.

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