Growth On The Horizon For Retail Banking Technology

Global spending on retail banking technology will increase by 24 percent over next five years to hit $132 billion, according to new figures released by Ovum. APAC enjoys highest growth of 49 percent 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 APAC region.

“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 percent in Emerging Asia-Pacific within the next five year timeframe and hit $1.9 billion, as new branches open in the less saturated markets.”

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The independent technology analyst believes that 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 (in emerging markets) and channel integration.

Ovum’s figures show that APAC investment in technology to allow customers to access banking services via the internet will experience growth of 39 percent from 2010 to 2015, to hit $1.8 billion. “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,” said Knapik.

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 percent from 2010 to 2015, hitting $650 million in Emerging Asia-Pacific and growth of 28 percent during the same timeframe, hitting $1.1 billion in newly industrialised and developed economies in APAC.