BENGALURU: From Tata Consultancy Services (TCS), Infosys to Tech Mahindra and Wipro, all IT services companies are competing to win digital transformation deals in the BFSI (Banking, financial services and insurance) vertical. Companies are seeing an opportunity in core banking and in payments space, among others. Though the vertical witnessed a slowdown in spending in the recent quarters, it has been slowly recovering.
Tech Mahindra new CEO Mohit Joshi in the recent earnings call spoke about the recovery that is happening in BFSI in FY25. “I do believe that the vertical overall will recover. From the Tech Mahindra perspective, we have certain unique pockets of strength, which is why I think we’ll be a competent late-mover,” he said. As part of its strategic roadmap, it wants to capitalise on late mover advantage and it targets high potential sub-verticals such as wealth management, asset management, core banking and payments. BFSI contributed 16.3% of the company’s revenue in Q4FY24 compared to 15.5% in the previous quarter.
Infosys in March quarter inked 6 deals in BFSI space and it has a larger BFSI portfolio. The BFSI segment contributed 26.4% to the company’s topline in the fourth quarter and it expects BFSI in FY25 to be better than FY24.
In Q4, the BFSI TCV (total contract value) for TCS was $4.1 billion. “For the BFSI vertical, 2023 was a year of resilience, balancing the challenges due to inflation and complex geopolitics against the initial benefits from rising interest rates,” TCS CEO K Krithivasan said.
“In 2024, while evolving regulation, transformative technologies like Gen AI, cybersecurity, embedded finance, and green transition have become the constant driving change, businesses are going to be focused on innovation driving their plans and building new business models for the future that will unravel tremendous growth potential,” he added. TCS continues to see pent-up demand in BFS, which will be a growth driver in the medium to long term.
Wipro’s Americas-II market unit grew 1.9% q-o-q on the back of strong performance in Capco, BFSI, Hi-Tech in Canada.The company said almost 60% of its revenues in this market comes from the BFSI sector.
HCLTech witnessed 12.1% y-o-y growth in its financial services vertical in FY24. Srinivasan Seshadri, Chief Growth Officer and Global Head, Financial Services, HCLTech said, "The 12.1% growth this year is largely on the back of great execution of fairly complex projects that we have worked, largely in hybrid cloud, where we’ve made sure that the customers have benefited from our expertise in taking them to optimal solutions. We’ve also had fairly good growth in different new accounts that we’ve opened in the last 3-4 years."