IDC: Technology driving banks' investment

IDC: Technology driving banks' investment

Optimisation and reducing business complexity amongst 10 initiatives

Local banks are using technology to implement countercyclical strategies to maximise competitive advantage according to IDC. A new study by Financial Insights, an IDC company, has found 10 strategic initiatives for 2009. These are priorities that will dominate the technology investment agenda for local banks over the next 12 months.

The banks covered in the report include ANZ, ASB, Commonwealth Bank of Australia, Fronde, Kiwibank and Westpac.

The report also sizes the 2008 IT services spending by local banks at over $450 million with HP/EDS the market leader with 29 per cent share.

IDC NZ senior market analyst Louise Francis says that while this study presents banks’ initiatives as discrete areas of investment, none occur in isolation.

“It will be vital that a bank’s strategic initiatives focus on long-term IT objectives and are integrated holistically with core business strategies.”

The 12 initiatives include:

1. IT optimisation and reducing complexity: this strategy revolves around the need for banks to maximise and standardise the use of existing technology assets. Banks will look closely at how the multitude of hardware, software and IT services can be integrated for greater efficiency and effectiveness.

2. Customer centricity: integrating multiple customer focused systems for a single customer view and developing the complete customer experience.

3 .Risk management and compliance

4. Security, information integrity and privacy: both internal and external sources of fraud are of concern to local banks. As security breaches will erode a banks reputation rapidly, local banks will look closely at security and fraud detection tools

5. Core banking transformation: core transformations will continue in 2009, through some of the projects have been deferred or downgraded as the financial implications of the economic crisis affect decision making. Value for money, rapid ROI, integration and rapid implementation will be key objectives.

6. Outsourcing and alternative delivery models: New Zealand banks will also continue to explore outsourcing options and alternative delivery models such as software as a service as they seek to reduce costs, create efficiencies and become more nimble.

7. Payment strategies: mobile and electronic payment mechanisms will continue to be enhanced to provide a seamless integrated system.

8. Supporting deposit growth

9. Green technology: cost savings will be the key driver in adoption of green technology in 2009, rather than legislation.

10. Mobile financial services: New Zealand will continue to be the hotbed of innovation for trialling new mobile financial services. For example, parent banks in Australia often trial new products locally before rolling out in Australia or international markets.

Join the CIO New Zealand group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

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