More Indian IT firms to produce banking products
Demand for a greater variety of banking software is prompting more Indian IT companies to become product developers and not solely software service providers, according to a joint industry survey released on Friday.
The Banking Systems Survey 2002-03 found 44 per cent of the 68 responding IT companies planned to come out with banking products.
That marks a shift in focus away from depending almost exclusively on software services. In the past year to March, products accounted for only an estimated four per cent of India's $7.7 billion in software industry exports.
India's IT industry is now scrambling to develop new sources of revenue to fuel growth in the face of a global slump in IT spending. Developing products is also a way of attracting clients to which services like application integration can be sold.
"Indian banks will be shifting from a core focus on branch automation software to more specialised products for ALM (asset liability management), risk management and treasury," said Anurag Khanna, the chief executive officer of Banknet India.
Banknet India, an IT-focused bank industry consultancy, conducted the survey. The results were released at a banking, financial services and insurance industries IT seminar in Mumbai organised by the Nasscom.
The software areas of greatest potential are ALM and risk management because there are relatively few products to meet growing demand in those areas, Khanna said.
The two largest product categories now are total bank automation (TBA) and Web-based applications, which jointly account for a quarter of the 185 Indian-company banking products covered by the survey.
Mumbai, the country's financial capital, was found to be home to the largest concentration of IT companies producing banking software.
Some 38 per cent were based in Mumbai, including market leaders like i-flex Solution, ICICI Infotech, Tata Consultancy Services and CMC.
Pune and Bangalore were each home to 17 per cent.
Participating in the survey were 58 Indian and 10 foreign IT companies and 24 banks, both Indian and four foreign lenders.
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