Innovation gets more budget and mindshare in APAC banks: IDC

  • IDC Financial Insights report on top 10 trends to impact banking
  • Growth of digital-only customer segments will raise urgency for omni-channel
Innovation gets more budget and mindshare in APAC banks: IDC

THE new benchmark for spending on ‘new’ categories of technology, as opposed to spending on ‘business-as-usual,’ is 25% in the banking industry, according to IDC Financial Insights.
 
In a statement, IDC Financial Insights Asia/Pacific said it recently published a report that presents the top 10 trends expected to impact business and technology decisions in banks in the upcoming year.
 
The IDC Financial Insights report Asia/Pacific Banking 2014 Top 10 Predictions: Banking Beyond the Usual (IDC Financial Insights Doc #AP250872) looked at the IT investment plans of 180 banking institutions in the Asia Pacific region.
 
“We observe an upsurge in investments on emerging technologies and newly-minted concepts,” said Michael Araneta, consulting and research director at IDC Financial Insights Asia/Pacific.
 
“These will continue to gain management attention as they investigate how they can innovate, and what technologies they need to innovate with,” he said.
 
IDC Financial Insights said that this pursuit of innovation will shape the overarching trends in the industry in 2015. The top 10 predictions for 2015 are:

  • 25% of IT budgets will be allocated to many new concepts;
  • Large banks will crowd out smaller competitors in many areas, including in innovation;
  • The industry will move toward lifestyle banking, adding advisory, aggregation, and facilitation to bank offerings;
  • Cloud-first policies will gain momentum;
  • Risk analytics, data aggregation, and regulation (radar) will be the new orientation for it investments in risk management;
  • The growth of digital-only customer segments will raise urgency for the omni-channel;
  • Disruptions will cause payments revenue to shrink – some by at least 15%;
  • Big data programmes will become tactical, while data management becomes more strategic;
  • 'Nationalistic IT’ will set the stage for Asia Pacific vendors to also go super-regional; and
  • Asia will lead the adoption of bank payment obligations, but growth for now will mostly come from cannibalising letters of credit.

The 2015 Prediction report goes through the impact of new technology considerations like the omnichannel, new types of customer touch points, tactical programmes in big data analytics, next-generation payments, software-defined datacenters, risk analytics, gamification, and mobile micro-apps.
 
The report also highlights other emerging technologies that are not currently being featured among banks, but also need to be explored for their use cases in financial services: Internet-of-Things (IoT), robotics, cognitive systems, human interfaces, and even more sophisticated analytics.
 
Araneta is confident that the new year will see other organisations from different industries partner with banks, either through joint venture tie-ups ‘coopetition’ consortiums, shared infrastructure arrangements, or through traditional industries extending their footprint into banks.
 
“The impact will be observed in how value chains in financial services will see major disruptions. These can be in the areas of payments, value-added data, origination, customer on-boarding, and credit analytics,” he said.
 
IDC Financial Insights recommends banks to consider how they will require new sets of skills to be acquired or developed in the IT organisation. These skills might not be traditional banking skills but they will be necessary to assess the risks, rewards, and opportunities around the Third Platform of IT.
 
Related Stories:
 
Banks should be banking on APIs and apps, not applications
 
The 3rd Platform and the future of emerging Asean
 
Banks in Malaysia face new threat … and opportunity: Accenture
 
 
For more technology news and the latest updates, follow @dnewsasia on Twitter or Like us on Facebook.

 
Keyword(s) :
 
Author Name :
 

By commenting below, you agree to abide by our ground rules.

Subscribe to SNAP
Download Digerati50 2018-2019 PDF

Digerati50 2018-2019

Get and download a digital copy of Digerati50 2018-2019