Monday, March 05, 2007

Annual Banking IT Budget to Increase by 30% by ’10 – Deloitte

According to the latest study by Deloitte, the annual IT budget of the banking industry is expected to increase from 6 percent in 2006 to 30 percent in 2010. Several banking organizations around the world will increase the percentage in their IT budget to secure technology services from various offshore providers operating from low labor cost countries, such as India and China, in the next three years.

The study also reported that the banks have started relying on offshore service providers, as they have moved away from outsourcing low-level work. At present, banks consider offshoring as a basic necessity and not just a cost-cutting strategy. Also, offshoring of technology workers help in savings as the Indian programmers receive 40-80 percent less than their US competitors.

According to the study, shifting bank’s IT projects to an offshore service provider could save about 40 percent in their IT budgets. It also claimed that extensive salary hike reduces the cost savings offered by offshore outsourcing. About 55 percent of the banking IT executives expect offshoring costs to increase by about 10 percent in 2007, while 36 percent expect a decline in the costs.

1 comment:

rob said...

Riding the rapid expansion of the Internet, some parts of the offshore banking king industry are making tax-avoidance techniques -- once mainly offered to high-net-worth individuals in private conferences -- available online to average ...