Australian banking and securities firms are set to spend $18.1 billion on technology products and services this year, slightly less than last year, according to analyst firm Gartner.
But the downward trend won’t last long as the market is expected to rebound next year to $19.1 billion.
According to Gartner vice president of service delivery, Chris Bell, Australian banks have already made great progress in building digital experiences, but there was still more to be done in digitising and automating end-to-end processes across front and back office operations to improve customer experience, reduce costs and mitigate supply chain risk.
“Not surprisingly, the impact of COVID-19 has contracted 2020 technology spend for financial services organisations in Australia,” he said.
Process automation, delivering a more holistic use of group data and ongoing simplification of core platforms, were some of the areas that will attract increased investment and focus from banks in the years ahead, Bell said.
From a global perspective, banking and securities IT spending will decline 4.7 per cent to US$514 billion, but will rebound next year with a 6.6 per cent growth rate.
Spending on mobile and PC devices will see the biggest decline at 12.1 per cent, followed by data centre systems.
“With a better understanding of the impact of COVID-19, banks and securities firms are now accelerating automation initiatives, such as customer-facing chatbots, robotic process automation (RPA) and end-to-end account origination solutions,” Gartner senior director analyst Jeff Casey said.
“They’re also focused on redesigning organisation structures and workflows and reprioritising modernisation initiatives.”
Following strong growth of five per cent in 2019, the impact of COVID-19 will see spending on IT services decline in 2020 with contract size, terms and deal type severely impacted, as large transformation projects are curtailed or canceled, Gartner said.
“IT services spending will begin to rebound as banks accelerate reprioritised modernisation initiatives in 2021,” Casey added.