You know the financial services industry is on the mend when bankers start investing in technology again. And, according to several recent surveys, bankers are planning to do just that in 2014 and beyond. Sixty-one percent of community banking executives said they would increase capital spending over the next year, with IT (46 percent) being the top area of investment, in KPMG’s 2013 community banking survey. Mobile banking and payments (40 percent) and leveraging data to enhance customer development (22 percent) were named as the most important IT-related projects pertaining to customer growth over the next year.
IDC Financial Insights recently announced an updated set of Worldwide IT Spending Guides that provide an analysis on the current status and projected growth of IT spending in the banking, capital markets and insurance industries. It believes banks will account for half of the worldwide total in 2014 with IT spending forecast to be $215 billion.
Gartner Inc. also revealed its top industry predictions for IT organizations and its users for 2014 and beyond. It believes most industries are facing accelerating pressure for fundamental transformation, including embracing digitalization in order to survive and stay competitive. Because of this, Gartner forecasts that by 2016 poor return on equity will drive more than 60 percent of banks worldwide to process the majority of their transactions in the cloud.
And, although few community banks currently offer cards and/or devices with EMV chips (see the ATM article on page 18 or the Technology Focus column on page 25 for more information on EMV), a significant percentage of respondents to the Independent Community Bankers of America’s 2013 payments survey plan to do so within the next two years — 42 percent for debit cards, 27 percent for credit cards and 18 percent for prepaid cards. The ICBA survey also found that some bankers were not waiting until 2014 to begin investing in updates: Fifty-five percent of community banks increased spending in 2013 compared with only 44 percent in 2011.
To learn more about the spending plans of financial institutions in the coming year, go to BankNews.com and click on the link below.
Kari English is senior editor of BankNews.
Copyright (c) January 2014 by BankNews Media