Banks in the Asia Pacific region will be allocating a quarter of their IT budgets on new concepts/technologies, predicts market research firm IDC.
According to the latest report by IDC Financial Insights Asia Pacific, an arm of IDC that focuses on the financial sector, this pursuit of innovation will shape next year's overarching trends in the banking industry.
The trends include:
- Large banks will crowd out smaller competitors in many areas, including innovation;
- The industry will move towards lifestyle banking, adding advisory, aggregation and facilitation to bank offerings;
- Cloud-first policies will gain momentum;
- Risk analytics, data aggregation, and regulation 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 percent;
- 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 (BPO) but growth for now will mostly come from cannibalising letters of credit.
The report also lists the emerging technologies that banks should be leveraging to improve their operations and services. These technologies include the Internet-of-Things (IoT), robotics, cognitive systems, human interfaces, and even more sophisticated analytics.
Michael Araneta, director of consulting and research at IDC Financial Insights Asia/Pacific, is confident that banks will soon adopt those emerging technologies. "These technologies will continue to gain management attention, as banks investigate how they can innovate, and what technologies they need to innovate with."
However, he did advise banks to think about how they will need to develop or acquire new skills that are required by the new technologies. These skills might not be traditional banking skills but they will be necessary to assess the risks, rewards and opportunities around emerging technologies, he added.
Titled "Asia/Pacific Banking 2015 Top 10 Predictions: Banking Beyond the Usual", the report surveyed 180 banks in the region to learn more about their IT investment plans. It goes though the impact of new technology considerations such as omni-channel, new types of customer touch points, tactical programmes in big data analytics, next generation payments, software-defined data centres, risk analytics, gamification, and mobile micro-apps.
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