It isn’t that digitization of the financial sector has reached a saturation point. Large financial institutions are increasingly looking inwards to meet the demands of the marketplace.
Considered as a cash cow for India’s IT services companies for long, the banking and financial sector is gradually being weaned off the outsourcing model. The companies are now opting to build and maintain software in-house.
With emerging technologies, such as blockchain, which are touted to play a pivotal role in the financial sector, bankers are keen to keep their cards close to their chest and cut reliance on third parties for technology. India still continues to be the preferred destination for technology hubs though. Many foreign banks have set up global in-house centres (GIC) in cities such as Mumbai, Bengaluru, and Chennai.
The banking domain has been key to the fortunes of Indian IT companies, but the share of the finance vertical in their earnings has been on a downward spiral in the past couple of years.
The share of revenue derived from the banking sector by Tata Consultancy Services (TCS), the largest IT company in the country, declined by 2.3 percentage points, from 33.4 percent in FY17 to 31.1 percent in FY18. A similar trend was observed in the annual reports of peers. The segment’s share in the overall revenue of Infosys and Cognizant has slipped by 1.4 percentage points and 3 percentage points, respectively.
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Source:https://www.moneycontrol.com/news/business/companies/indian-it-companies-take-a-hit-as-foreign-banks-switch-to-in-house-tech-solutions-2850061.html
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