Abstract

The corporate banking revenue of leading banks in India has largely remained muted or negative during most part of the current financial year. Declining net interest margins on lending are further adding pressure on nonlending banking businesses to broaden the revenue base from corporate banking. As a result, banks are expected to revisit their legacy IT infrastructure as they pursue enhancement in payment, liquidity, and trade services by expanding as-a-service capabilities to move closer to the value chain of their clients. 

Serving corporate clients requires banks to create a wide range of offerings aligned with their working capital, liquidity, and investment management requirements. This mandate accelerated investments in appropriate technology to survive in the digital marketplace. In line with the said expectations, India banks are projected to spend over US$1 billion by 2025 on public cloud initiatives, indicating the prominence of cloud in driving the technology transformation. Similarly, IT spending for treasury-as-a-service capabilities is projected to cross US$66 million by 2025 at a compound annual growth rate (CAGR) of 20%, reiterating the resolve of the banks in India to get closer to their business clients.

"With the stress on the economy receding, as indicated by surging Index of Industrial Production (IIP) and Goods and Services Tax (GST) collections, corporate banking is poised to gain momentum in India. Traditionally, the corporate banking space in India has been dominated by global banks, but large domestic banks are increasingly gaining market share with aggressive investments in technological and operational capabilities, narrowing the gap with their global competitors," says Ganesh Vasudevan, research director, IDC Financial Insights.

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