According to a new report, the large financial institutions are falling behind with the latest tech.
Despite the fact that mobile banking and payments are right at our doorstep and are being used at an increasing rate, in Canada, almost half of all banking execs don’t believe that they have the IT systems, infrastructure, and processes in place to be able to meet present – let alone future – customer needs and expectations over their smartphones.
The report was entitled “Banks: Customers Expect That You’re Always On and Available, Are You Ready?”
The report was made by CenturyLink and it pointed out that even some of the central services still require better IT. It pointed out that when it come to mobile banking and technology, about 40 percent of C-level financial execs who were surveyed didn’t feel that the IT infrastructure was in place for meeting the basic banking service needs to the level of customer expectations. CenturyLink’s managing director of financial services, Roji Oommen, said that “To stay competitive in a technology-driven marketplace, Canadian banks must be both financial institutions and mobile technology innovators.”
While mobile banking may not yet be keeping up with technology, it’s not that the resources aren’t out there.
The hope that CenturyLink certainly has from the insight in this report is that the banks will see that it and companies like it area already offering the types of services that will help those financial institutions to get themselves on the right path. These strategic technology partners do actually have the potential to spot the mobile tech solutions that are needed and to help in their integration – if not implement them on behalf of those Canadian banks.
The report also determined that 78 percent of banking execs in the country felt that customer demand for improved mobile banking and technology based services would cause them to be required to do more outsourcing. It stated that when those execs were asked about what parts of their IT are currently being outsourced, 86 percent said that they did so for IT infrastructure requirements, while another 72 percent said that they were outsourcing for their IT security.
This represents a considerable increase in the amounts that banks were spending on this IT last year.
An Ovum report has just been released, in which its results have shown that retail banks around the world will be boosting their spending on technology by 3.4 percent, this year, which reflects a serious growth in the mobile payments sphere.
This will bring the total amount that banks intend to spend on IT up to $118.6 billion, worldwide.
The Ovum industry analysts released their forecasts that said that North America’s retail bank spending on mobile payments and other technologies will increase by 3.3 percent. Europe would be seeing a rise in its spending by 1.8 percent. It is Asia that will see the highest amount of spending growth, with an increase of 5.1 percent.
In the mobile payments and banking report Ovum stated that the importance of this channel is evident.
The business trends report indicated that mobile payments and banking would become a “clear IT investment priority in 2013” for retail banks. It also indicated that the amount of spending for all online channels would grow by 6.2 percent this year. That included smartphones, tablets, and PCs, alike.
Also included in the report, was the speculation that data privacy and credit risk management would be among the primary drivers of technology spending in terms of 2013’s mobile payments and online banking. It stated that the worldwide MIS investment would hit the $6.4 billion mark before the year is over. It also pointed out that banks in North America would be spending $2.3 billion in this domain, and this will represent 5.1 percent of the overall spending within that department.
Ovum’s release indicated that within that continent, the growth in the spending for technology was an indicator of increased efforts to reduce costs and to place more concentration on various digital channels and marketing efforts that would help those financial institutions to boost their revenue growth alongside customer satisfaction.
Ovum senior analyst for financial services technology, Jaroslaw Knapik, explained the predictions about mobile payments and technology spending by saying that “Whilst regulatory compliance has certainly fuelled a significant amount of the investment predicted in the forecast, it is by no means the sole driver,” adding that “The level of investment in digital channels gives a clear indication that banks are fully cognizant of the growing expectations of their customers, as well as the opportunities they present.”
