Research: Kable Global ICT Intelligence finds that a need to improve customer services is shifting IT budgets.
Retail banks are faced with increasing pressure to offer the best possible service to customers while maximising revenues.
The knock on affect to their ICT spending has seen a desire to increase their investments in software and communications, partly pushed by the desire to stay competitive.
Much of retail banks’ software expenditure largely revolves around upgrading their core banking platforms, according to research by Kable. However, investment in communications is being made in order to connect their widely dispersed stakeholders.
According to the research, most (37%) increased spending by 1-5% in 2014-15 compared to 25% in 2013-14. Although a large amount (30%) revealed flat spending, this number has dropped from 36% the previous year.
Some (13%) increased the ICT budget significantly by 6%+ in 2014-15, compared to only 7% in the previous year. This suggests an increased focus on improved ICT capabilities.
Little change can be seen from 2014-15 in how the external ICT budget was spent, although slight increases in communications spending from 13%-15% is supported by a decrease of 2% in spending on services.
Banks’ ability to use their data with success in a Big Data strategy has been questioned, recently in research by Talend, which highlighted the challenge of legacy systems.
However, according to Kable, there is already some significant investment in various areas of analytics.
Analytics has already been invested in by 69% of respondents, with 62% prioritising more or new investment in the next two years.
This is followed by data warehousing/marts with 64% already invested and 55% prioritising for investment, real-time BI sees 53% already invested with 58% prioritising and only 45% have invested in social sentiment analysis, although 60% are prioritising investment.
Real-time BI can enable banks to receive instant event triggers that assist in making timely correctly actions. Social sentiment analysis aids in helping retail banks to use the benefits of social media to enhance their brand image and customer service.
The connection between the increased investment in communications and BI technologies appears to be a realisation that good customer services are important to retail banking success.
The research from Kable is based upon 129 respondents, with 9% of respondents having between 5,000 and 9,999 employees.
The full report can be accessed here.