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Retail banking IT spending to hit US$118.6 billion in 2013: Ovum

Zafar Anjum | Feb. 5, 2013
Asia Pacific banks are the most prolific with their spending, with 5.1 percent growth, says the research firm.

Retail banks across the globe will see IT spending grow 3.4 percent, reaching US$118.6 billion in 2013, said research firm Ovum today.

According to Ovum, this growth will be due to CIOs focusing on customer satisfaction and revenue growth.

Taking the lead in spending growth are the Asia Pacific banks. Ovum said the AP banks are the most prolific with their spending, with 5.1 percent growth, compared with European banks (1.8 percent) and North American banks (3.3 percent).

In a new Business Trends report, Ovum suggests that "within Asia Pacific, the optimistic shift towards greater IT spending signals a reduction of the cost-cutting measures seen previously by the global banking industry. Instead, 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 and fuel cross-selling and upselling opportunities in the short and mid-term."

Among the digital channels, mobile banking is the clear IT investment priority in 2013, said Ovum. The firm forecasts that in the Other Channels category, which includes mobile banking, spending will grow 7.5 percent in Asia Pacific in 2013, and rise at a compound annual growth rate of 8.2 percent between 2013 and 2017.

Overall, spending on online channels in this region (including traditional online banking services and mobile-browser-based banking services) is also set to grow 7.5 percent in 2013. In parallel, to compete in the digital world, a number of retail banks will shift their 'bricks and mortar' marketing activities online.

Also, fraud detection and liquidity risk management will become key regulatory compliance drivers of IT spending in 2013, with global investment into Management Information Systems predicted to reach US$6.4 billion over the course of the year, and US$1.5 billion of spending in Asia Pacific alone. This accounts for 6.3 percent of overall IT spending by Asia Pacific banks.

 

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