SaaS Now a 'Condition for Survival' for India's Financial Firms

Enterprise SaaS is now a 'condition for survival' for India's financial firms, says a report. BFSI institutions view B2B SaaS solutions as critical for growth, security, compliance, data management, and achieving cost-efficient scalability.

SaaS Adoption: A Condition for Survival

Enterprise Software as a Service (SaaS) is no longer optional for India's financial services firms, it is now a "condition for survival," according to a Multi-Act Equity Consultancy Private Limited report, as banks, insurers, AMCs, NBFCs and distributors race to meet regulatory complexity, rising consumer expectations and distribution demands.

"A majority of BFSI institutions we engaged with view B2B SaaS solutions as critical to their next phase of growth--especially in areas such as security, compliance, data management, and customer experience," the report said. Demand is strongest in banking, wealth, and payments, with "mid-sized players leading the charge on adoption." The key signal across institutions: "scalability is the new currency, and B2B SaaS offers a cost-efficient path to achieve it."

Technology is already adding value, with 70 per cent of institutions citing Security & Risk Management and 60 per cent citing Data Management & Analysis as top areas. When it comes to impact, "70 per cent of the respondents said that technology is providing them with a competitive advantage when it comes to scaling their operations."

Navigating the Market: Challenges and Opportunities

Yet startups face structural hurdles. "Sales cycles stretch 6-12 months or more, straining early-stage momentum. Implementation often stalls due to coordination gaps with System Integrators. Go-To-Market strategies are frequently under-defined." The report stresses that "staying power becomes essential, as true traction requires years--not months--and patient, aligned capital."

The buyer preference is clear, "A majority of the respondents prefer the 'buy' approach as they already have a significant portion of their infrastructure on the cloud." Security solutions are "frequently subscription-based," and switching cycles are typically "two to three years," with institutions favoring solutions that are "latest minus one"--proven and with sufficient references.

On the vendor side, 52 per cent of builders said B2B SaaS in fintech is already in the "accelerated phase of growth," while 65 per cent expect it to grow at "accelerated (>25 per cent) pace over the next 5 years." RegTech, WealthTech and alternative lending are expected to outpace the market.

The "Five Big Asks" from SaaS providers include, Stay true to label, improve the quality of resources, introduce more use cases, build for scale, and address vendor lock-in. "The need to scale is often deprioritised due to investor pressure to show rapid progress, resulting in solutions that must be rebuilt once growth accelerates," the report warned.

The Imperative for Innovation and Scale

The report argued that "India needs to accelerate this adoption to compete globally, especially with the increasing use of AI and blockchain."

For startups, "faster innovation and delivery are crucial to mitigate external competition." (ANI)

(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)