Retail banking IT spend on the rise - Ovum
Global spending on retail banking technology will increase by $3.6 billion in 2012, with the Asia-Pacific region spending a total of US$1.2 billion over the course of the year, according to a recent report from research analysts Ovum.
Overall, technology spend in the Asia-Pacific retail banking sector is likely to hit US$30 billion over the next five years, growing with a compound annual growth rate of 5.7 per cent from 2012 to 2016, the study found.
The need to grow revenues to pre recession levels coupled with changing regulatory compliance demands have been cited as key instigators for the increased focus on technology spend, the report said.
According to the study, Retail Banking Technology Spending Model Through 2016: Business Function Segmentation, spending on retail banking technology in the region will increase by US$7.1 billion with banks in emerging economies witnessing the fastest growth at a rate of 8.3 per cent in 2012.
Retail banking technology spending in Australia is forecast to grow with a compound annual growth rate of 3.4 per cent over the next four years to 2016, while New Zealand will see a compound annual growth rate of 3.8 per cent over the same period.
Jaroslaw Knapik, financial services analyst at Ovum and author of the report, said revenue growth was a key priority for many institutions with technology playing a key role in attaining this goal.
“Returning revenues to pre-recession levels is a priority for a number of institutions. This will lead to accelerated investment in channel technology, predominantly online banking or other channels such as mobile which will reach compound annual growth rate of 7 per cent and 7.1 per cent respectively,” he said.
The report also found that ever increasing regulatory expenditure relating to Basel III will drive investments in technologies that reduce costs such as data management, business process management, business intelligence and analytics.
Globally, online banking is expected to be the fastest growing area in 2012, rising 5.3 per cent to hit $8.3 billion by the year end, the report added, with other channels such as mobile, management information systems and multi channel integration/customer management systems also forecast to grow at high rates.
- Categories
- Banking, Technology
- Tags:
- Ovum, Basel III
- Author:
- Angela Faherty, afaherty@financialpublications.com.au
- Article Posted:
- January 16, 2012
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