The world's banks are to hike their IT and innovation budgets over the coming year to counter the growing threat from large tech companies like Apple and Google, according to a Capgemini survey of clients of core tech vendor Temenos.
Only 26% of respondents to the survey cited incumbent banking players as their biggest rivals. Banks instead see a significant threat coming from companies not operating in their market today, such as overseas banks and challenger banks. But banks are most worried about the threat from non-traditional players, especially technology companies, such as Google, which were cited by 27% of respondents.
IT systems and innovation investment were rated the top priorities by banks quizzed as they seek to fend off competition from new entrants. IT budgets are forecast to be up strongly in 2016, with 64% of respondents anticipating higher spend over the next 12 months.
Michael Leyva, vice president & global banking practice lead at Capgemini Financial Services, comments: “Banks are well aware of competitive threats, especially from the challenger banks and “branchless” direct banks. They understand the customer loyalty landscape is changing and are changing their strategic priorities accordingly, with more emphasis on fostering innovation, enabled by renewing technology and hiring the right talent."