Amid a spurt in the BFSI (banking financial services and insurance) vertical growth, IT engineering services companies have been acquiring firms to expand their capabilities in software engineering. At least five engineering services companies have acquired firms in the US and UK in the past two months, a move that will help them boost their BFSI vertical growth.

This week IT engineering services provider L&T Tech Services signed an agreement to acquire California-based Intelliswift for a total consideration of $110 million. Amit Chadha, the company’s chief executive and managing director, told ET that the firm plans to double the revenue of the acquired company (whose annual revenue is about $100 million) in the next three years. While half of Intelliswift’s revenue comes from high tech, the rest comes from fintech and retail, along with the private equity channel.

Persistent Systems in September said it was acquiring select assets from SoHo Dragon for $4.7 million. SoHo Dragon is a Wall Street-based consulting and staffing firm primarily in the business of providing IT services to BFSI customers. The Pune based firm said at the time, “The acquisition of the select assets will help in consolidating the relationship with a strategic and large customer in the BFSI domain.”

Also Read: Fog lifts: IT spending revives on AI, BFSI gets growth and hiring surges

Another US-based IT engineering services provider, EPAM Systems, which has more than 9,000 employees in India (its second largest delivery centre after Ukraine), announced its acquisition of First Derivative last month. First Derivative is a managed services and consulting firm for capital markets with 1,800 employees globally. The deal added more than 100 new clients and strengthened EPAM Systems’ presence in the UK, Ireland, North America and APAC.

Similarly, acquisitions of JUXT by Grid Dynamics and Blankfactor by Globant are other instances of IT engineering services companies expanding their BFSI vertical through acquisitions. While JUXT is a UK-based software engineering firm specialising in data-intensive systems for banking, including risk platforms, structured notes, equity derivatives and financial reporting, Blankfactor is a US-based product engineering firm specialising in payments, banking and fintech.

Also Read: How IT companies are using acquisitions to build engineering prowessPareekh Jain, chief executive of engineering insight platform EIIRTrend, said, “After many quarters, we are now seeing positive QoQ growth in BFSI engineering. In Q2 of 2024, BFSI engineering grew by 2.6% QoQ. Every engineering service provider is now augmenting its BFSI capabilities, with many aggressively pursuing acquisitions.”

He added, “Additionally, GenAI is generating interest within the BFSI sector, and with expectations of discretionary spending returning, GenAI is anticipated to drive further growth in this segment.”

Jain further said, “BFSI engineering involves applying digital engineering for platform development, increasing platform adoption, developing and integrating various payment systems, regulatory platforms and data engineering for financial reporting and compliance, among other areas. These platform developments can directly serve banks, financial institutions and insurance companies, or work with software product companies and BFSI ISVs (independent software vendors).”

Also Read: IT firms chasing acquisitions to enhance their topline and skills

Amid a spurt in the BFSI (banking financial services and insurance) vertical growth, IT engineering services companies have been acquiring firms to expand their capabilities in software engineering. At least five engineering services companies have acquired firms in the US and UK in the past two months, a move that will help them boost their BFSI vertical growth.

This week IT engineering services provider L&T Tech Services signed an agreement to acquire California-based Intelliswift for a total consideration of $110 million. Amit Chadha, the company’s chief executive and managing director, told ET that the firm plans to double the revenue of the acquired company (whose annual revenue is about $100 million) in the next three years. While half of Intelliswift’s revenue comes from high tech, the rest comes from fintech and retail, along with the private equity channel.

Persistent Systems in September said it was acquiring select assets from SoHo Dragon for $4.7 million. SoHo Dragon is a Wall Street-based consulting and staffing firm primarily in the business of providing IT services to BFSI customers. The Pune based firm said at the time, “The acquisition of the select assets will help in consolidating the relationship with a strategic and large customer in the BFSI domain.”

Also Read: Fog lifts: IT spending revives on AI, BFSI gets growth and hiring surges

Another US-based IT engineering services provider, EPAM Systems, which has more than 9,000 employees in India (its second largest delivery centre after Ukraine), announced its acquisition of First Derivative last month. First Derivative is a managed services and consulting firm for capital markets with 1,800 employees globally. The deal added more than 100 new clients and strengthened EPAM Systems’ presence in the UK, Ireland, North America and APAC.

Similarly, acquisitions of JUXT by Grid Dynamics and Blankfactor by Globant are other instances of IT engineering services companies expanding their BFSI vertical through acquisitions. While JUXT is a UK-based software engineering firm specialising in data-intensive systems for banking, including risk platforms, structured notes, equity derivatives and financial reporting, Blankfactor is a US-based product engineering firm specialising in payments, banking and fintech.

Also Read: How IT companies are using acquisitions to build engineering prowessPareekh Jain, chief executive of engineering insight platform EIIRTrend, said, “After many quarters, we are now seeing positive QoQ growth in BFSI engineering. In Q2 of 2024, BFSI engineering grew by 2.6% QoQ. Every engineering service provider is now augmenting its BFSI capabilities, with many aggressively pursuing acquisitions.”

He added, “Additionally, GenAI is generating interest within the BFSI sector, and with expectations of discretionary spending returning, GenAI is anticipated to drive further growth in this segment.”

Jain further said, “BFSI engineering involves applying digital engineering for platform development, increasing platform adoption, developing and integrating various payment systems, regulatory platforms and data engineering for financial reporting and compliance, among other areas. These platform developments can directly serve banks, financial institutions and insurance companies, or work with software product companies and BFSI ISVs (independent software vendors).”

Also Read: IT firms chasing acquisitions to enhance their topline and skills