As India’s central bank steps up the emphasis on financial sector stability, banks are beefing up their technology teams and enhancing IT spending, as cybersecurity concerns and the need for AI-led services are increasingly becoming core to the sector.
Even as overall hiring remains tepid, demand for technology professionals is on the rise in the sector as banking and investment firms significantly increase their IT spending. With projections indicating 12.2% growth in their IT spending in 2024, the focus is on adopting advanced analytics, artificial intelligence and machine learning-driven solutions, and automation technologies, data from multiple staffing firms showed.
“The BFSI (banking, financial services and insurance) sector has seen a surge in hiring demand but in niche areas. We have seen an urgency by the clients to move to cloud, and this will go up in coming quarters. Cybersecurity has also seen huge demand,” said Kapil Joshi, deputy chief executive at Quess IT staffing.
Staffing services firm Teamlease said the BFSI sector is targeting 6-8% growth in tech hiring in 2024, with a focus on fresh talent and tech-savvy professionals.
Also Read | How BFSI is playing a lead role in Indian IT services comeback
BFSI companies are set to make the most recruitment among non-tech sectors, with their technology workforce expected to jump to 490,000 by 2026, up 22.5% from 400,000 in 2023. This compares with an estimated 12% increase in overall workforce hiring (to 8.0 million from over 7.1 million), according to Teamlease.
As per staffing firm Xpheno, BFSI is curretnly the second highest recruiter of tech talent, behind manufacturing.
Insights from Foundit, a Quess Company, indicated that more than 8% of the BFSI sector hirings in June were for software development roles, while 15% were for product management positions and 11% for cybersecurity.
The BFSI sector had seen an increase of 7% in hiring for data science & analytics roles and 10% for AI/ML engineers in June, as per the Foundit report released last month. The other sectors which hired more than the BFSI space in the two roles were software services, internet & ecommerce and advertising & public relations.
“The global outlook further underscores this trend, with IT spending in banking and investment services expected to grow by 9.7% in 2024. As companies pivot from cost-centric decisions to future benefits, there is a clear emphasis on leveraging technologies like generative AI, cloud computing, and cybersecurity to enhance customer experience and operational efficiency. This surge in tech investments is fueling the demand for skilled professionals in the sector,” Joshi said.
Also Read | IT companies expect BFSI to lead recovery in a few quarters
Tech transformation in banks
The country’s biggest bank, State Bank of India, has declared plans to hire 12,000 freshers as probationary officers and associates in FY25 ending March next year. As much as 85% of them will be engineering graduates.
Over the past three years, mid-size lender Yes Bank onboarded nearly 200 technology professionals annually to “stay ahead in the API (application programming interface) space”, enhancing and customising its product offerings to address key business challenges and technology-enabled risk management.
“In today’s rapidly evolving landscape, technology adoption isn’t just an option, it’s a necessity for any business … Looking ahead, Yes Bank remains dedicated to further strengthening its in-house development and IT infrastructure teams. This ongoing investment in talent will be crucial in building sustainable, unified customer experiences, advancing digitisation and fortifying data management and security architecture,” chief human resource officer Archana Shiroor said.
The global capability centres (GCCs) of BFSI companies are also absorbing significant tech talent. India has around 185 GCC units in BFSI, according to Teamlease.
“The BFSI industry is witnessing a surge in demand for professionals skilled in GenAI. Key areas of expertise include natural language processing, ML, data science, and a deep understanding of financial services,” said Krishna Vij, business head for IT staffing at Teamlease Digital.
In 2024, the BFSI landscape will be characterised by transformative trends driven by digital transformation, significant infrastructure investments, prudent risk management, AI integration, and open banking initiatives. These trends include the widespread adoption of AI-powered tools for customer engagement, hyper-personalisation of banking services, rise of neo-banks, maturation of open banking ecosystems and an intensified focus on cybersecurity to safeguard digital transactions.
Sounding alarm on the IT global outage on July 19 due to cybersecurity firm CrowdStrike’s faulty update, the Reserve Bank of India, in its monthly bulletin this month said, it is necessary that banks and financial institutions build appropriate risk management frameworks in their IT, cybersecurity and third-party outsourcing arrangements to maintain operational resilience.
