American banks consider technology investment a top spending priority for the year ahead, with platform simplification the most important IT-related project, according to a KPMG survey.
The poll of over 100 senior executives reveals that, in the face of regulatory reforms and a lacklustre economy, banks are focused on re-examining business models and initiatives that increase operational efficiency and reduce costs.
This means a focus on technology: asked to identify the three areas where their bank would most increase spending over the next year, 58% of respondents say IT, ahead of products or services (37%), acquisitions (32%), and business model transformation (20%).
Among those respondents who have significant cash on their balance sheets, the most likely time frame for investment was this year (39%) or next year (40%), while 21% said 2014 or later.
Platform simplification - IT infrastructure, applications - is the most important IT-related project in the next year for 58%, with mobile payments cited by 39%, using data more effectively for regulatory requirements by 38%, and creating an integrated view of customer accounts by 37%.
Asked to identify the channels commanding the most capital investment from their bank, 38% of respondents cite m-banking and payment platforms for mobile devices, compared to just 24% for purchasing more branches and 23% for online banking.
Judd Caplain, national account leader, banking and capital markets practice, KPMG, says: "The shift away from investing in the traditional branch customer channel to the channels utilising mobile technology is noticeable, and we expect this trend to continue at an accelerating pace."
More generally, 69% of respondents identify regulatory and legislative pressures as the most significant barrier to growth over the next year. To help counter this, most are looking at which types of customers to focus their growth strategy on, with mass-affluent, young professionals and the unbanked the top targets.
Meanwhile, although 32% still consider national banks the biggest threats to their organisation, 28% cite new market entrants such as PayPal and retail outlets like Walmart.