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Banking crisis may hit a $245bn key Indian sector
March 21, 2023
The collapse of large banking institutions may not only lead to a reduction in existing business but also trigger reduced tech spending in the future along with delayed deal closures, they said. Companies such as Tata Consultancy Services (TCS), Infosys, Wipro and LTIMindtree, which have high exposure to US banking institutions, are likely to be impacted if the crisis worsens, they added.
The precarious state of US regional banks is causing tension among service providers that have business ties with them, said Phil Fersht, founder of HfS Research, adding that this includes TCS and Infosys. “I spoke with the CEO of a tier-1 IT firm this week who has been talking to BFS clients and he expressed that the whole sector is in a worrying state of panic,” said Fersht.
North American banks lead tech investments in the retail banking sector globally and spent over $82 billion on IT budgets in 2022 out of a global spend of $250 billion, according to data from financial advisory firm Celent. Indian IT companies have significantly gained from tech spending by BFSI.
“Companies like TCS, Infosys, Wipro and LTIMindtree have an exposure through their banking vertical across North American regional banks. Over the short term, there will be an impact to BFSI growth due to this crisis,” said Peter Bendor-Samuel, founder of IT consultancy and research firm Everest Group.
Important Links:
- 4-IN-1 Professional Diploma in Banking, Financial Services & Insurance (PDBFSI): https://tscfm.org/courses/4-in-1-professional-diploma-in-banking-financial-services-insurance-pdbfsi/