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Global research and advisory firm Gartner, in its latest report, states that Indian banking and securities firms would have spent close to $9.1 billion in current Calender year 2017 on their Information-Technology (IT) infrastructure. This represents an 11.7 per cent increase in spending on IT services by banks and security services companies in 2016, after there was slowdown in spending over the previous two quarters. More investments are expected to flow into Artificial Intelligence and Blockchain for application in financial services as consumers move to digital banking is big way. Today a customer can access his/or her bank account with relative ease and take simple steps to make changes to their investment portfolio and account details, in addition to purchasing new products or services. The Indian banking sector’s spending on device infrastructure will grow at 20 percent in 2017, followed by IT spending at 15.8 per cent, Gartner said in a statement. Rajesh Kandaswamy, research director at Gartner said “financial services firms are lagging behind global top-performing organisations in relation to digital transformation.
They hope that doing ‘more of the same’ will equate to improved performance”.Major banks like State Bank of India, Housing and Development Finance Corporation, ICICI, Axis Bank, Bank of Baroda and Punjab National Bank etc. introduced various mobile payments and banking applications for their retail and corporate customers. And over the past year, thanks to demonetisation and the government’s push towards a “less-cash” economy, the adoption of these applications has increased substantially. These mobile and web-based applications have paved the way for banking and finance services to transition into an environment where there is less reliance on cash and more data available for collation and analysis. The combination of big data collection, large-scale analysis, targeted advertising to customers, and an interactive and empowered customer experience is said to radically transform the relationship between banks and financial services firms and their respective customers. Moutusi Sau, principal research analyst at Gartner. “…As banks focus on enhancing the legacy infrastructure and making digital transformation the primary goals for the banks, we will see more investments flow into newer concepts like artificial intelligence (AI) and blockchain.” From designing the IT infrastructure that can enable smoother operations and better customer experiences, to deploying robotic technologies that increase efficiencies in areas bogged with tedious tasks, banks and securities services firms also need to invest in electronic fraud (transaction) detection methods and cyber security operations. Both of which are complex and technical tasks, involving huge costs, and require consistent and constant research and development.