04 Mar 2022

IDC Reveals India Corporate Banking Predictions for 2022 and Onwards

INDIA, March 04, 2022 – International Data Corporation (IDC) reveals predictions for India corporate banking in the latest report IDC FutureScape: Worldwide Corporate Banking 2022 Predictions — India Implications.

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 corporate lending is further adding pressure on non-lending banking businesses like transaction services to broaden the revenue base from corporate banking. As a result, banks are revisiting their legacy IT infrastructure as they pursue enhancement in treasury and trade services by expanding 'as is service' capabilities to move closer to the value chain of their clients.

At the policy level, the sharp increase in capital expenditure in the Union Budget 2022-23 to fund various infrastructure projects has come as a boon for the corporate banks. In particular, the emphasis on the multi-modal supply chain is bound to bring the focus on transaction and trade services. Accelerated adoption of the cloud, extensive leverage of artificial intelligence, and efficiency in data management are some of the key technologies that will be at the forefront of the connected ecosystem.

"With the stress on 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 in the immediate future. Traditionally the corporate banking space in India has been dominated by global banks, however large domestic banks are increasingly gaining market share with aggressive investments in technological and operational capabilities, narrowing the gap with their global competitors,” Ganesh Vasudevan, Research Director, IDC Financial Insights.

Some of the key corporate banking predictions that will impact the technology buyers and IT industry in India are:

Prediction #4: AI in payments: By 2025, 40% of payments will be optimized using AI-derived routing models.

Transaction banking services in particular will witness increased adoption of AI to improve speed and efficiency of payments in cash and trade services. Implementing AI-optimized payments requires a comprehensive strategy for capturing and leveraging payment data with end-to-end visibility.

Prediction #6: CBDC impact in cash management: With CBDC rollouts gaining momentum, by 2025 more than 15% of tier I corporate banks will offer their clients integrated solutions to unlock liquidity from both traditional and digital assets.

With CBDC scheduled to be introduced in FY 2022-23, banks will have to gear up for the changes. They need to evaluate the existing workflow and data structure to identify the processes and systems that require adjustments to support CBDC adoption. Also factor in infrastructural requirement to support custodial and depository services for CBDCs with combination of centralized relational database management systems and distributed ledger technology.

Prediction #10: Connectivity platforms: 35% of corporate banks will platformize connectivity by 2023 to deal with the growing channel fragmentation. As an added benefit this will be the basis for actionable, proactive alerts and data services.

Increasingly diverse and fragmented channel offerings and the associated complexity will force corporate banks to develop platform capabilities to ensure consistent, scalable, and standardized data exchange across all interfaces. A connectivity platform can help to drive innovation, help financial institutions to get the most out of the present and emerging interfaces, and ensure cost efficiency, quality, and reliability of all connectivity interfaces.

These predictions are discussed in greater detail in the new IDC FutureScape report, IDC FutureScape: Worldwide Corporate Banking 2022 Predictions — India Implications (Doc #AP48732022). Each year, IDC releases its Top Predictions through its IDC FutureScape reports to give a crystal ball view of what is ahead for the rapidly changing ICT industry. These predictions have been used to shape the strategies and business objectives of technology leaders and business executives in the next 1-5 years. To learn more about the upcoming IDC FutureScape reports, please click HERE.

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For more information about this report, trends, or questions for analysts, please contact Shivani Anand at sanand@idc.com . You can also follow IDC India’s Twitter and LinkedIn pages for regular updates on IDC’s research & events.

About IDC FutureScape

IDC FutureScape  reports are used to shape IT strategy and planning for the enterprise by providing a basic framework for evaluating IT initiatives in terms of their value to business strategy now and in the foreseeable future. IDC's FutureScape are comprised of a set of decision imperatives designed to identify a range of pending issues that CIOs and senior technology professionals will confront within the typical 3-year business planning cycle.

To learn more about IDC FutureScape reports for 2022, please visit: https://www.idc.com/events/futurescape.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,200 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world's leading tech media, data and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC  and LinkedIn. Subscribe to the IDC Blog for industry news and insights: http://bit.ly/IDCBlog_Subscribe.

Coverage

Regions Covered

India


Topics Covered

Financial resource management


Vertical Markets

Connected banking