Banks Intend to Increase Their IT Spend

Shifting away from the cost-cutting they've been focusing on in recent years, retail banks in North America intend to increase their IT spending this year, according to a new report from Ovum. Allocating more capital toward improving customer satisfaction and increasing revenue, IT spending at North American banks will increase 3.3% in 2013, more than that for their European counterparts (1.8%) but less than those in Asia (5.1%), Ovum forecasts.

"The continuing shift towards greater IT spending signals a reduction of the cost-cutting measures seen previously by the global banking industry," Ovum elaborated in a new Business Trends report. "Instead, a focus on digital channels, such as online and mobile banking, and digital marketing activities will enable them to improve customer satisfaction and revenue growth strategies and fuel cross-selling and upselling opportunities in the short and mid-term.

Ramping up mobile banking services and products is a clear priority for banks when it comes to IT investment priorities as they attempt to leverage the new capabilities of mobile technology, such as location-based services, Ovum stated in a press release. Including mobile banking, Ovum forecasts that banks' IT spending in the "Other Channels" category will increase 6.7% in North America in 2013 and 8.2% at a compound annual growth rate (CAGR) from 2013-2017.

Banks' IT spending on online channels in North America, including traditional online banking services and mobile-browser-based banking services, will increase 6.2% in 2013, as retail banks continue to shift more marketing activities from "brick-and-mortar" locations online.

Credit risk management and data privacy will also be focal points for retail banks' IT spending, driven by the need for compliance with new regulatory initiatives, Ovum says. Global investment in Management Information Systems (MIS) will grow to reach $6.4 billion in 2013, with $2.3 billion of spending on MIS in North America alone. That will represent 5.1% of overall IT spending by North American banks, according to Ovum.

Clients who have exposure to banks should take note and plan accordingly. CHR Solutions' cloud and managed services portfolio can enable you to approach local banks with an attractive suite of IT services.

Written by Kevin Kutcher at 14:00

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