The Indian IT industry is poised for a boost as domestic banking and investment services firms ramp up their IT spending. Projections indicate a 12.2 per cent growth in spending, reaching $13.2 billion in 2024, compared to $11.80 billion in 2023. This increase would be driven by growing demand for software and IT services, with expected growth rates of 18.5 per cent and 11.4 per cent respectively.
A significant factor contributing to this trend is the shortage of skilled talent in emerging technologies such as artificial intelligence (AI) and generative AI.
Banking and investment firms are turning to IT service providers to bridge these gaps and accelerate the adoption of advanced analytics, AI-driven solutions, and automation technologies. These advancements are expected to streamline operations, cut costs, and enhance decision-making within the financial sector.
The global outlook for IT spending in banking and investment services is even more promising for the Indian IT industry, with Gartner forecasting a 9.7 per cent increase to $716 billion in 2024, up from $658 billion in 2023. This surge in global demand presents a significant opportunity for the Indian IT industry, which has faced macroeconomic pressures.
IT services, software to drive growth
IT services and software are expected to be the primary drivers of this growth, contributing to a combined $503 billion. The need for innovation, operational agility, and cost optimisation is pushing financial institutions worldwide to invest in technology.
“Banks globally are leveraging technology as a catalyst for innovation and enhancement,” said Debbie Buckland, Director Analyst at Gartner. “They are pushing to amplify operational agility and speed to market, to keep up with the pace of change driven by external forces,” she said.
The increasing reliance on IT service providers to fill talent gaps and drive technological transformation bodes well for the Indian IT sector, which is known for its skilled workforce and competitive pricing. This trend is expected to provide a much-needed boost to the industry and contribute to India’s overall economic growth.