The recent survey highlights that retail banks have been increasing their ICT budgets significantly and are enthusiastic about making substantial investments in newer ICT solutions. The survey of 136 retail banks also finds that 39% plan to increase their overall ICT budgets in 2014, which is an increase of 20% compared to 2013. Only 28% are planning to decrease their overall ICT budget in 2014, compared to 46% in 2013. The survey also highlights that retail banks are focusing on increasing investments in their core ICT systems in 2014, and are keen to allocate 66% of their total ICT budgets to hardware, software, and IT services combined.
The survey shows that retail banks are inclined to invest in data centres to manage the huge amount of growth in customer data and to ensure better storage and speedier access to information. Similarly, retail banks are spending on cloud computing services to lower their operating costs, improve scalability, and ensure greater processing capabilities. In addition, retail banks are taking a keen interest in investing in various business intelligence segments in order to collect competitive insight from the customer data residing in their core banking, ledger and other systems. Spending on mobility is another area of focus, as retail banks look to adopt the latest mobility devices such as tablets and smartphones and various mobile applications to improve customer service and productivity.
“Strict regulations are forcing retail banks to invest in IT projects relating to compliance and risk management to ensure better control of their process breakdowns and to uphold their integrity”, comments Renjitha Balkrishan, a Kable analyst. “Mounting government demands as banks play an integral role in the growth of the economy, have ensured that retail banks are making substantial investments in compliance and risk management projects.” Meanwhile, retail banks are choosing ICT providers based on their competence in providing disruptive technologies at a lower cost. Kable therefore believes that ICT vendors who can provide innovative technologies at optimum prices can expect enhanced opportunities in the sector.
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