Bullish on BFSI in long-run but this year 'tough': Cognizant

US-based IT services firm Cognizant, which cautioned the market of a slower pace of revenue growth this year citing concerns in the banking segment has said it remains bullish on the BFSI sector in the long-run.
The company, which competes with Indian IT firms like Tata Consultancy Services and Infosys, said it expects this year to be a "little tough" for the segment that accounts for a major chunk of the IT outsourcing market globally.
"... When I look at the drivers of financial services and indicators based on staffing decisions, bonus payouts they are making, it's a tough time in banking right now. Long-term, we continue to be very bullish on banking and financial services, we think it's a great market but this year is a little tough," Cognizant President Gordon Coburn said at the Morgan Stanley Technology, Media & Telecom Conference.

He added that if some of the volatility in the market settles down, it will free up some spending by banking clients.
"But I would rather be pleasantly surprised rather than counting on it. To some it may be a difference in philosophy, whether the glass is half full or half empty," he said.
Announcing its financial results for 2015, Cognizant had forecast a negligible change in revenues for January-March 2016 from the preceding quarter and 9.9-14.3 per cent rise for the entire 2016.

While this was in line with Indian IT industry body Nasscom's estimates of 10-12 per cent growth for 2016-17, it was lower than its own 21 per cent growth it clocked in 2015.

Cognizant, which has a large part of its workforce based in India, had said there was a "soft start" to the year in banking and financial services due to macroeconomic concerns and in healthcare (on the back of the industry consolidation in the payer industry).
However, India's largest software services firm TCS had said it is confident of continuing to post healthy growth in the BFSI segment next fiscal, allaying fears flagged by rival Cognizant.
Coburn said the slowdown it has seen is broad-based.
"Each customer is a little different but it's not one customer that is going to cause the issue. We have looked at the comments of others. Is it (that) we are being too conservative or they are being aggressive or they have one particular client that they are expecting to ramp up, its probably some combination of all that," he added.

Talking about last year's financial performance, Coburn said it was a "tremendous year" for the company.
"We raised guidance three times during the year... The strategy played out exactly as we wanted. We saw a shift in client spend from 'run the business' towards 'change the business'. We have been investing for a number of years to build up our digital and consulting capabilities," he said.
He added that the integration of legacy systems with the digital environment is playing well with its capabilities.