Retail banks’ IT spend to hit $US118.6b in 2013: Ovum

Claims it is increasing IT spend as it focuses on customer satisfaction and revenue growth

Retail banks will see IT spend grow 3.4 per cent globally, reaching $US118.6 billion in 2013, according to research firm, Ovum.

It claimed the growth follows the increased CIO focus on customer satisfaction and revenue growth.

Its latest business trends report, Business Trends: Asia-Pacific Retail Banking Technology Investment Strategies 2013 it stated that the Asia-Pacific banks are the most prolific with their spending (5.1 per cent growth), as compared to European banks (1.8 per cent) and North American banks (3.3 per cent).

Ovum suggested that within Asia-Pacific, the optimistic shift towards greater IT spending signalled a reduction of the cost-cutting measures seen previously by the global banking industry.

Instead, it said a focus on digital channels, such as online and mobile banking, and digital marketing activities will enable them to improve customer satisfaction and revenue growth strategies, as well as fuel cross-selling and upselling opportunities in the short and mid-term.

“The optimistic signs on the economic horizon are driving the shift away from cost-cutting and towards investment strategies within the retail banking sector,” Ovum, financial services technology senior analyst, Jaroslaw Knapik, said.

Among the digital channels, Ovum said mobile banking is the clear IT investment priority in 2013, as retail banks attempt to capitalise on the features unique to mobile, such as location-based services.

It forecast that mobile banking will grow 7.5 per cent in Asia-Pacific in 2013, and rise at a compound annual growth rate of 8.2 per cent between 2013 and 2017.

Overall, spending on online channels in this region (including traditional online banking services and mobile-browser-based banking services) is set to grow 7.5 per cent in 2013. “Whilst regulatory compliance has certainly fuelled a significant amount of the investment predicted in the forecast, it is by no means the sole driver.

“The level of investment in digital channels gives a clear indication that banks are fully cognizant of the growing expectations of their customers, as well as the opportunities they present,” Knapik said.

More about: Ovum, Technology
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