Australian banking and investment services companies are forecast to spend $28.4 billion on technology products and services by the end of 2022, highlighting a market segment that partners can make the most of.
This forecast is according to research firm Gartner, which said it represented a rise of 12.7 per cent year-on-year.
Within the market, IT services is the category that is expected to see the largest spend, at 47 per cent of the pie, or $13.4 billion.
Meanwhile, the fastest growing category is software, with spending anticipating to grow by 21 per cent, up to $6.4 billion.
Additionally, the industry has gravitated towards three emerging technologies, according to Gartner — generative artificial intelligence (AI), autonomic systems and privacy-enhancing computation (PEC) — which are expected to contribute to goals to run, grow and transform businesses.
“While growth is the top priority, the need to manage risk, optimise costs and increase efficiency also requires new technology innovations,” said Moutusi Sau, VP analyst at Gartner.
“Generative AI enables bank CIOs to offer technology solutions to the business in pursuit of revenue growth, while autonomic systems and privacy-enhancing computation are long-term solutions that provide new options for business transformation in financial services.”
The first of these emerging technologies, generative AI, learns a digital representation of data artifacts and generates new creations similar, but not identical, to the original.
By 2025, Gartner predicts generative AI will make up 20 per cent of all test data for consumer-facing use cases.
Autonomic systems are the second emerging technology, which are self-managed physical or software systems that learn from environments and dynamically modify their own algorithms to adapt to complex ecosystems.
This allows them to support new requirements and situations, optimise performance and defend against attacks without human intervention.
Gartner claims that by 2024, 20 per cent of organisations that sell these systems will require customers to waive indemnity provisions related to the learned behaviour of the products.
At the moment, autonomic systems are mostly software-based in the banking sector, but hardware-based humanoid robots are starting to appear in smart branches and can be applied to autonomous debt management, personal finance assistants automated lending.
Meanwhile roboadvisors are also in use, which Gartner considers to be essentially low-level autonomic systems, but there are trust concerns associated with these products due to high levels of automation.
Rounding out the top three emerging technologies is PEC, which secures the processing of personal data in untrusted environments — something the research firm said is “increasingly critical” due to evolving privacy and data protection laws as well as consumer concerns.
Gartner expects this technology to be used by 60 per cent of large organisations for analytics, business intelligence or cloud computing by 2025.
“Within financial services, data has an inherent role in any analytics, computing and data monetisation efforts,” Gartner said.
“The adoption of PEC is on the rise in use cases like fraud analysis, intelligence operations, data sharing and anti-money-laundering.”