Look, banks having their own tech arms isn’t some shiny new idea—it’s been around. But man, does it make sense today. Some banks grew these organically, others teamed up via JVs or innovative setups. Think SBI’s C-Edge with TCS, IDBI Intech, or not-for-profit coloured section-8s, kicked off by RBI and IBA. These outfits are pulling in Rs 100-600 crore toplines—not bad, right? I even sat on the board of Baroda Sun Technologies, Bank of Baroda’s move into this space, with a gig to integrate as the bank’s biggest tech user. Solid starts, but let’s be real: the scope’s been pretty narrow—more plumbing than fireworks.
Now, though, Indian BFSI (Banking, Financial Services, Insurance) is staring at a tech tsunami. It’s gonna shake up jobs and open massive doors. Here’s why it’s a no-brainer for us to lean into tech arms.
The Tech Shift—and the Goldmine It Brings
Indian IT’s a juggernaut—5.4 million strong, says NASSCOM. BFSI’s digital and tech crew? Maybe 50,000 across banks, markets, and insurance. Point is, IT’s got the numbers. But here’s the twist: the big IT players—who’ve been BFSI’s tech backbone? They’re going through a massive transition. AI, automation, shifting demands—it’s displacing talent. These are devs who’ve spent years crafting workflows and tackling gnarly systems. Soon, they’ll be looking for new homes. That’s where BFSI wins. Mix that tech know-how with our deep banking chops, and you’ve got a winning combo.
Indian banks have been leveling up—moving from networks and core systems to DBAs, sec-ops, even dipping into design and dev. Some nailed it, some flopped. We’ve built data warehouses, run data centers, splashed in data lakes, and now we’re all about the cloud. Problem is, it’s not just about skills—it’s about alignment. Incentives and talent mass haven’t clicked yet. BFSI’s been playing catch-up. Cue the captive tech arm. Set up a dedicated shop, let the devs (and maybe the designers) loose, and watch the magic happen.
Some Numbers to Chew OnAsia Pacific BFSI bought US$391 billion on tech in 2024—India’s a chunk of that (thanks Cyrus Daruwala). Our tech spend’s growing ~11-12% a year (IDC), faster than the global 8-10%. Still, we’re heavily under-invested— room to grow, big time. Captives can tackle the heavy stuff: core banking refreshes (US$107 billion regionally), customer journeys, cloud shifts, data infra. Used to be, anything past a basic SPA app was a slog—engineering and upkeep were brutal, and DevOps took an army. Now? With IT talent flooding in and AI-ops juicing up CI-CD pipelines, those headaches are fading fast.
Where I See This Going- Software’s Getting Trickier
BFSI tech’s about to get complex—custom, layered solutions. Banks with tech arms will own this, while others scramble. More late-nights and CR headaches for them. - DevOps Turns into AI-Ops
CI-CD’s getting a serious upgrade. AI’s gonna make it 100x smoother—less grunt work, more speed. - Compliance Baked In
Software with regs built right in is the future. Devs can code it, but BFSI pros bring the compliance smarts. Perfect tag team. - Testing’s Still a Pain
Even with all this, testing won’t get easy. Scalability, edge cases, compliance—it’s sticking around. And with enormously connected systems, complexity is going through the roof. So the final checkpoints need to be solid girders.
Some banks have dipped their toes. But now is when it gets real. This tech shift’s a once-in-a-generation shot to build something huge. I’m talking captives that don’t just save costs but turn profits—maybe even unicorns worth a billion bucks. Robust, scalable solutions beyond SPAs used to be a pipe dream—customization and maintenance were killers. Not anymore. With IT talent pouring in, AI smoothing things out, and BFSI’s domain expertise steering, we’re primed for a leap.
Wrapping It UpSo yeah, tech arms for banks? Always made sense, but now they’re clutch. This displacement wave’s a wake-up call—and a massive opportunity. Indian BFSI can amp up, blend tech and banking know-how, and maybe spawn a unicorn or two. I’m excited to see where it takes us.
