Revving up European banks: from IT-as-Cost to IT-for-Growth

European banks will need to start building a growth momentum to get them out of the sustained downturn. What are IT decision-makers and IT providers doing to help rev-up the GROWTH engine? What IT initiatives would you put YOUR euros on?

Given that European leaders have not pulled a night-out in Brussels since December 2011, one may think the worst of the eurozone crisis is behind us. Most say the worst is yet to come; there are even prizes for the best essay on how to dismantle the eurozone.

Blind cost reduction has been the norm in most eurozone banks for several months. Several IT investments- especially Change-the-Bank budgets and large transformation programs- have been on hold while banks fought for survival in 2011. Strict cost discipline will perhaps remain in force especially until the 30th June deadline for the European Commission’s capital adequacy requirements. 

However, banks’ focus will have to shift from bare survival to fueling (cautious) growth or them to ever emerge from the crisis.

To help banks gather "escape velocity", it is time to re-evaluate key IT initiatives - especially those focused on customer retention, cross-sell/up-sell, revenue growth and improving customer service and satisfaction.

IT leaders need to put their business and financial hats on and understand which projects and initiatives that can “fund themselves”, promise quick returns on investment, and can help increase banks' topline in the short- to medium-term. 

On the other hand, IT providers who are suffering from this downturn need to understand this situation, and work out approaches and financial constructs that will help banks proceed with these investments: gain/share and co-investments, deferred payments, service credits and "apps on taps" type arrangements are the need of the hour.

Which IT projects would you put YOUR euros on? What discretionary spend (i.e. excluding mandatory and compliance-related spend) would make the best business-sense in these times?