Singapore and Hong Kong, February 27, 2014 – Reassessment of the unique relationship between innovation and compliance will define new banking initiatives in Asia in the upcoming decade.
“The region is keyed up for a convergence between technological and business capabilities in order to capitalize on Asia’s rapid financial maturation,” says Michael Araneta, research director for IDC Financial Insights Asia/Pacific at the Asian Financial Services Congress 2014.
Araneta expects IT spending devoted to ‘new’ technologies – the ones that are meant to develop fresh financial servicing capabilities, rather than for sustaining business-as-usual activities – will account for a substantial 30% of total budgets in 2014; 37% of the new budgets will be dedicated to the expansion and modernization of channels. This correlates with the polarization of growth in key Asia/Pacific market segments, which IDC Financial Insights expects will spur leading FSIs to diversify their technology footprint while being more critical of IT mismanagement within their organizations.
“This window of opportunity will breed a new generation of technological champions among the region’s financial institutions, and these will come from a stock capable of extending existing risk management disciplines into IT project administration. In particular, 50% of Asia/Pacific IT executives believe that coping with regulatory guidelines will top the risk and compliance agenda of 2014.”
He notes that core banking, risk management and channels will retain their importance as the three main areas of IT investments. Unlike previous years, however, initiatives will be diverted towards all-encompassing solution suites, rather than standalone systems for a single domain. These, in total, will account for 52% of technological spending this year.
Araneta expects IT spending in Asian banks to grow 6.6% in 2014 over 2013. This represents a stabilization of investments over the 8.8% growth spike the industry saw in the previous year, and will persist at 7.0% average CAGR leading up to 2017.
“I believe that this speaks of a more disciplined approach in technological pursuits as a whole. For the first time in a long while, banks are neither spending out of fear nor hype – this new era of proactive rather than reactive innovation will prove to be a refreshing one.”
About IDC Financial Insights
IDC Financial Insights assists financial service businesses and IT leaders, as well as the suppliers who serve them, in making more effective technology decisions by providing accurate, timely, and insightful fact-based research and consulting services. Staffed by senior analysts with decades of industry experience, our global research analyzes and advises on business and technology issues facing the banking, insurance, and securities and investments industries. International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology market. IDC is a subsidiary of IDG, the world’s leading technology, media, research, and events company.
About IDC
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. For more than 48 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world’s leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com