For banking, ROI outranks compliance in 2014: Fico poll

  • Poll reveals shift in priorities and increased demand for analytic technology
  • One-third of respondents say 10-25% of IT spend will be set aside for ‘customer-centric’ IT

For banking, ROI outranks compliance in 2014: Fico pollTHIS year, rising competition is driving the need for technology that will provide a return on investment, according to Asia Pacific banking risk professionals, who rated regulatory compliance and regulation as less important than in 2013.
According to a poll conducted by Fico, 72% of respondents felt that driving profitability in 2014 is of greater importance than it was in 2013.
The poll was conducted among chief risk officers (CROs) from banks and lenders across the region that attended the Fico APAC CRO forum in December, 2013, to address the topic, 'Managing Risk and Driving Profitable Growth.'
The poll also revealed a growing appreciation of the role customer relationship management technology has in driving profitability. About one-third of respondents (34%) estimated that 10% to 25% of their organisation’s IT spend will be set aside for ‘customer-centric’ IT, as opposed to organisational IT.
Daniel McConaghy (pic), president for Fico in Asia Pacific, said allocating IT budgets to improve customer centricity shows an organisation’s desire to increase its competitiveness and grow market share.
“Yet while Asia Pacific (APAC) banks are investing strongly, it’s notable that 58% of APAC CROs felt their bank was behind its European and American peers when it came to technology and innovation,” he added.
The poll by the predictive analytics and decision management software company also asked CROs to identify their top priorities for technology investments in 2014.
Originations -- the process of creating a home loan or mortgage – were ranked first, followed closely by mobile banking and marketing.
Fico noted that the expansion of existing customer relationships through the use of data analytics allows banks to take a more targeted and personalised marketing approach.
When it came to banks’ priorities in risk and compliance investments, credit risk was the clear leader, demonstrating the value banks are now placing on the sustainable growth of loan books to ensure delinquencies are kept at bay.
McConaghy said that sharpening analytic capabilities is “essential” to optimising decision management and meeting multiple business objectives.
“As IT priorities move from the back-end of organisations to the forefront, CROs are looking to adopt more sophisticated analytics technology and reap stronger returns on investment. 2014 will be the year that we see renewed growth in these capabilities amongst banks in APAC,” he added.
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