At a time when the growth of banking and financial services (BFS) verticals of IT companies is stagnating due to a slowdown in discretionary spending, Coforge stands out with a bullish perspective and aims to grow ahead of its peers in fiscal 2025, Gautam Samanta, president and global head of BFS told FE.
“Post-pandemic, the industry has navigated through numerous challenges, from bank failures in the US to persistently high interest rates. Despite these hurdles, we’ve seen necessary transformational activities persisting, particularly in enhancing customer experience and ensuring robust regulatory compliance,” Samanta said.
For FY25, growth from the BFS outlook remains positive for Coforge even as Samanta refrained from giving out specific figures. “I mean, last year also we led the growth and I am quite bullish about the outlook and the way we are kind of having the interaction with the customers… I think we will continue to deliver definitely market leading (growth),” he said.
In FY24, Coforge’s BFS sector contributed to 32.2% of the company’s revenue, marking a significant 17.1% year-over-year growth. Further, the firm signed a large deal in the quarter ended March with a $400 million total contract value for a ten-year deal in the BFS vertical.
Looking ahead, Samanta predicted that tech spending will continue to increase irrespective of the macroeconomic situation. “The investment in tech is still going to increase this year. So, even if the interest rates are not getting cut, as in some cases, there are non-discretionary things which they will continue to operate and work on which they need to do anyway. So, overall, I would say that, you know, I’m still cautiously optimistic.”
Analysts are predicting that the overall tech investment will still go up, maybe by 2%-3% and it will not come down for the banking financial side, he added.
GenAI IN BFS
Despite some of the inherent risks, banks are becoming increasingly optimistic about embracing GenAI, Samanta said. He categorises the company’s GenAI projects into three primary buckets: direct customer interfaces, internal operations enhancement, and intermediary customer service improvements.
“GenAI is enhancing developer productivity in tech shops through automated debugging and test case generation, which not only speeds up processes but also reduces errors,” he said. Additionally, GenAI’s role in customer engagement is profound, offering personalised experiences and supporting data-driven decision-making in customer interactions.
However, Samanta is candid about the financial aspects of GenAI. “While GenAI significantly enhances operational efficiencies and customer service, it is not yet a major revenue driver on its own.” He said that the value of GenAI lies in its ability to improve service delivery and customer satisfaction, which are critical in retaining competitiveness in the BFS sector.
Looking ahead, he is optimistic about the broader adoption and impact of GenAI. “The adoption is expected to cross the 50% threshold soon, making it a standard practice rather than a novelty.”
In Europe, the adoption of open banking frameworks is synergistic with GenAI advancements, paving the way for a more interconnected and efficient banking environment. This trend is expected to continue, with significant investments directed towards modernising core banking systems and enhancing regulatory compliance through technological innovations.