Global spending on retail banking to increase 24% in 2015
February 01 2011
Source : Asian Banking & Finance
An increase in spending on technology is expected over the next five years to hit US$132 billion, according to Ovum.
Asia-Pacific enjoys the highest growth of 49 per cent to hit $28.1 billion by 2015. Japan leads the region in terms of market size with a forecast of US$9 billion followed China (US$7.8 billion) and India in third place, holding US$ 2.7 billion in 2015. China and India holds the position for fastest growth in the AP region. Australia, on the other hand, holds fourth place forecast to grow from US$2.2 billion in 2010 to US $ 2.7 billion.
“An increase in spending on technology in branches is expected be one of the major driving forces behind this rise in the emerging markets”, said Jaroslaw Knapik, Senior Analyst. The technology spend for branches will increase by 53% in Emerging Asia-Pacific within the next five year timeframe and hit $1.9 billion, as new branches open in the less saturated markets”.
The independent technology analyst believes the overall increase in investment will be driven by the need to grow revenues and improve customers' trust. This will lead to accelerated investment in online and mobile banking, technology in branches and channel integration.
Ovum’s figures show that Asia-Pacific investment in technology to allow customers to access banking services via the internet will experience growth of 39 per cent from 2010 to 2015, to hit $1.8 billion. Senior analyst Jaroslaw Knapik commented: “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 allows ‘smarter’ selling and servicing, such as customer analytics and channel integration are expected to remain hot spot areas in the near future.”
According to Knapik ever increasing regulatory requirements will also drive investment into technologies that reduce costs, such as data management, business intelligence and analytics. Spending on various middle-office components, such as risk management, anti-fraud, compliance or performance management, based on these technologies, will experience growth of 51 per cent from 2010 to 2015, hitting $650 million in Emerging Asia-Pacific and growth of 28% during the same timeframe, hitting $1,1 billion in newly industrialized and developed economies in Asia-Pacific.