Banks to invest in IT through bumpy recovery
Wealth management institutions will continue to invest heavily in digital channels through the bumpy economic recovery, says technology research group, Ovum.
IT spending by the global wealth management industry will reach almost $35 billion by 2016, and will include heavy investment in digital channels, predicts Ovum.
Between 2011 and 2016, the Middle East and Africa (MEA) region will increase its IT spend at a compound annual growth rate (CAGR) of 9.1%, with South Africa’s investment reaching $366 million, according to forecasts made in July by global analysts.
“Increasing profitability is a priority for all financial institutions,” said Jaroslaw Knapik, senior analyst, financial services technology, Ovum. “As the use of digital channels increases, banks will strengthen their focus on mobile channels and self-service functionality in an effort to connect and empower their customers.”
The growth in IT spending by wealth management institutions will give rise to more personal financial management tools offered to customers. Increased support for smartphones and tablets will be driven largely by investment from non-financial institutions, as well as the recent advances made in mobile finance platform technology, Ovum said.
It forecasts that investment in Internet and presence technologies by MEA’s high net worth banking and financial planning businesses will reach $73 million, while retail brokerage and retail asset management organisations will increase their investment to $65 million and $37 million, respectively.
“Customer attitude toward banks has changed greatly as a result of the financial crisis. Increasingly, digital channels are being developed to improve customer loyalty and cross-selling opportunities but also to lower servicing costs,” Knapik said.
“While the economy is recovering, organisations should be focusing on the opportunity to increase revenue and improve trust among customers. This, coupled with the increased investment in personal finance management tools, will enable more self-management and closer monitoring of financial assets, helping to increase overall knowledge of finance management,” Knapik finished.
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