Too early to tell if banks will resume IT Spending: Cognizant

BENGALURU: Cognizant sees huge opportunity in helping transform large banks, which have held back spending on information technology over the last two years, but said it was still too early to tell if the spending would materialise.

Banking and financial services companies provide the largest chunk of Indian IT revenues, with large banks being the industry’s biggest customers. Growth from that sector has been slower than overall growth for large IT companies and analysts have been looking for signs that spending is returning.

“There is continued opportunity within the transformation requirements of the money centre banks. We continue to see the migration of the application suite to the cloud,” Gajen Kandiah, President, Cognizant Digital Business, told investors at a Morgan Stanley conference earlier this week.

But he added the company was still cautious.

“It’s too early to tell whether the dollars from the money centre banks are going to flow or not. This is an area we are watching. We need to wait and watch,” Kandiah said.

For 2018, Cognizant has forecast revenue of $16-16.3 billion, implying a growth of 8-10%. The company, while announcing its fourthquarter results, had said it was seeing the beginning of a recovery in the banking, financial services and insurance sector. Analysts have said that banks are increasingly looking at partnering with smaller players having niche skills, which has impacted large IT companies.

Kandiah said Cognizant’s reskilling programme was focused on helping employees make the shift as digital requires a single person to have a wide range of skills. In 2017, Cognizant said it had reskilled about 1,00,000 associates in high-end digital skills and said it would continue to make substantial investments in training its workforce.

The Teaneck, New Jersey-headquartered company employs about 2,60,000 people. Its headcount is falling in India but increasing in the US and Europe.