Global retail banking IT spending set for strong growth - Ovum

Global retail banking IT spending set for strong growth - Ovum

Global spending on retail banking technology is set to jump by nearly a quarter over the next five years, hitting $132 billion, according to analyst house Ovum.

Banks around the world will step up investment in online and mobile banking, channel integration and, in emerging markets, branch technology, in a bid to boost revenues and increase customer trust, argues Ovum.

Investment in technology that allows customers to access banking services via the Internet will experience growth of 33% from 2010 to 2015, hitting $9.7 billion.

Jaroslaw Knapik, senior analyst, Ovum, says: "There is a strong focus on online platforms and their extension onto mobile devices and tablets, given their ability to service clients at a lower cost. In addition, technologies that allow 'smarter' selling and servicing, such as customer analytics and channel integration are expected to remain hot spot areas in the near future."

Meanwhile, increasing regulatory requirements will also drive spending on technologies that reduce costs, such as data management, business intelligence and analytics. Global spending on various middle-office components, such as risk management, anti-fraud, compliance or performance management, based on these technologies, will experience growth of 30% from 2010 to 2015, reaching $7.2 billion.

The region that will see the biggest rise in tech spending over the next five years is emerging Asia Pacific, up 49% between 2010 and 2015 to hit $12.7 billion, followed by Middle East and Africa, with a 36% rise to $5.5 billion. This growth will be driven by the growth of branch networks and associated IT costs.

The two biggest markets by far for retail bank IT spending will continue to be North America and Western Europe but their rate of growth will lag. North America will see spending rise 23% to hit $50.2 billion in 2015 with Western Europe growing at just 19% to $40.1 billion.

"Recent budget crises within European governments are having a negative impact on the financial sector and consequently growth in retail banking technology in Europe will be slower than in other regions," says Knapik.

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