International banks have begun to revive technology projects that they shelved in 2023, which bodes well for the $254 billion Indian IT industry, which receives roughly one-third of its revenue from clients in the banking, financial services, and insurance (BFSI) sector.
Six quarters of low spending since the failure of Silicon Valley Bank were followed by a tentative recovery in BFSI client demand, according to quarterly reports from Tata Consultancy Services (TCS), Infosys, Wipro, and others.
TCS Chief Financial Officer Samir Seksaria said, “BFSI should come out faster as they are the ones that went into the caution mode first.” Seksaria hopes that the end of uncertainty surrounding the US election and central bank interest rate cuts will increase client confidence.
There may be a cascading effect from the recent earnings calls of major banks like JPMorgan Chase and Bank of America, which indicated a resurgence in demand for their tech services.
Reuters’ analysis of the top five US banks’ results for the quarter ended in June revealed that they increased their spending on tech investments by 1.2% sequentially and 6.8% year over year.
According to their earnings calls, the increased tech investments are intended to improve cybersecurity, customer experience, and regulatory compliance and modernise infrastructure through cloud migration.
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