BFSI tech spend rises, but IT services get smaller share

Banks and financial institutions are increasing their technology spending, but Indian IT services firms are capturing a shrinking share of the incremental wallet as a larger portion of budgets shifts towards AI infrastructure, software, cloud, cybersecurity and in-house engineering capabilities.

Technology spending by banks grew 8% year-on-year in the first half of 2026, compared with 4% growth in BFSI revenue for IT services, according to data from ICICI Securities. The divergence reflects a structural change in the composition of technology budgets, with a growing share of spending going directly to technology and software providers rather than outsourced services.