Retail banking technology spending in the Asia Pacific region is expected to increase by $1.2 billion this year and will reach $30 billion over the next five years, according to a new study by Ovum.
The study, entitled Retail Banking Technology Spending Model Through 2016: Business Function Segmentation, reported that the growth will increase at a compound annual rate of 5.7% from the beginning of 2012 to 2016.
The expense on retail banking technology in Asia Pacific will increase by $7.1 billion, with banks in emerging economies to grow at the rate of 8.3%.
Ovum financial services analyst and report author, Jaroslaw Knapik, said that the investment in technology has been largely driven by the need to increase and return revenues to “pre-recession levels”.
He said banks should improve customer trust and service to achieve this.
“This will lead to accelerated investment in channel technology, predominantly online banking or other channels such as mobile. Retail banks will invest in these areas in parallel to investments in channel integration and customer information systems,” Knapik said.
“This is due to the fact that technologies that allow ‘smarter’ selling and servicing, such as customer analytics and customer data management, are expected to remain hot areas in the near future. As sales activities are expected to be on the rise again, banks will also boost investments into operations as the ability to sell products faster and service customers’ better is a competitive differentiator in the retail market,” he added.
