The silver liningThe conversion of Goldman Sachs and Morgan Stanley into regulated commercial banks from brokerage houses could be a blessing in disguise. That is because commercial banks are bigger spenders on IT than investment banks.
"Commercial banks have a list of statutory provisions and compliance requirements to adhere to. This has been the highest spending areas for banks for the last couple of years. So, Goldman Sachs and Morgan Stanley could bring more business to IT companies," pointed out an analyst.
Tech firms, too, are harping on the now clichéd argument that the current financial mess will provide an impetus to outsourcing as the BFSI majors are forced to cut costs and improve efficiencies. Experts, however, opine that this will come with a lag.
Anurag Purohit, analyst with Religare Securities says, "Even in the last slowdown, it was only in 2003-2004 that offshoring increased in a big way. This time around too, such changes will take time, despite the fact that India's cost advantage continues to be intact." Viju George seconds this. "When companies look to survive and keep their body and soul intact, outsourcing doesn't top the list of priorities. It will eventually happen, nevertheless."
Image: Finance Minister P Chidambaram inspecting the statue of a bronze bull outside the Bombay Stock Exchange in Mumbai. | Photograph: Indranil Mukherjee/AFP/Getty Images
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