IT spending in Asian banks is expected to grow by 6.6 percent this year and will persist at the average CAGR (compound annual growth rate) of seven percent leading up to 2017, according to analysts at IDC Financial Insights in a media statement released on February 27, 2014.
Thirty percent of IT spending during that period will be devoted to technologies that enable banks to develop new financial servicing capabilities rather than technologies that sustain business-as-usual activities, said Michael Arenata, Research Director for IDC Financial Insights Asia/Pacific.
Slightly more than a third of the new budgets (37 percent) will be dedicated to the expansion and modernisation of channels. This correlates with the polarisation of growth in key Asia Pacific market segments, which IDC Financial Insights expects will encourage financial services institutions to diversify their technology footprint while being more critical of IT mismanagement within their organisations.
"This 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," said Arenata. "In particular, 50 percent of Asia Pacific IT executives believe that coping with regulatory guidelines will top the risk and compliance agenda of 2014."
Arenata said that the three main areas of IT investments for this year include core banking, risk management and channels. The analysts at IDC Financial Insights also predict that Asian banks will be more likely to invest in all-encompassing solution suites instead of standalone systems for a single domain.