The government, on Friday, announced one of the biggest mergers in the history of public sector banks in India. It decided to bring together 10 PSBs and instead of these individual entities, create 4 bigger entities or mega banks. Many economists have called this an attempt by the government to revive the falling Indian economy. While reading through several news posts on this merger, one news article caught my attention- “Latest PSB merger could create Rs 5,000 crore business in IT outsourcing”
As per the reports, a number of experts in the Fintech sector believe that this mega-merger could create business worth Rs. 5000 crores for the IT outsourcing industry. The merger would require the integration of a robust technology stack, which is forecasted to create business for various Indian IT outsourcing companies like Infosys, Tata Consultancy Services (TCS), and Wipro.
Digital Transformation would become the need of the hour and also create business opportunities for global consulting and IT services organizations like KPMG, PwC, EY, Accenture and IBM.
According to Mr. Pareekh Jain, founder and IT consulting expert at Pareekh Consulting says, "Initially, opportunities will come up in the space of IT consultancy for consolidation of the technology infrastructure. For this initial integration part, a one-time spend of around 0.5 percent of the combined revenue of the merged entities will be required. Post integration, technology spends of these banks will be higher, as these combined entities will have more resources to invest in digital technologies."
The IT spending of the combined banks after any merger is bound to increase. This would typically range between 0.25 to 0.5 percent of the total revenue generated by the bigger entity, here the 4 banks. In the FinTech industry, this sum would generally be spent on application modernization or migration.
With Indian IT firms planning to actively pursue the domestic BFSI sector, Classic Informatics also awaits an opportunity to serve the Indian PSBs. We have assisted many clients in the banking and financial services industry and would we eager to work on your digital idea as well.
Originally Published On 4th September