Significant risk in banks' business goals this year
BOSTON-- Aite Group's new report, Global Bank IT Strategy and Spending Report, 2014, shows how banks view technology in terms of their general technology goals, how they evaluate technology, and whether they are embracing new trends, such as big data and the cloud.
It explores banks’ levels of satisfaction, goals, spending, deployment preferences, and technology acquisition preferences on a line-of-business by line-of-business basis. These include consumer lending, core, analytics, and retail channels. It also identifies where banks are likely to spend, the underlying drivers of spend intensity, and banks’ preferences for both obtaining and deploying technological capabilities.
Although 56 per cent percent of the respondents embrace technology as a valuable asset for achieving competitive advantage, Aite Group finds ambivalence in banks' levels of satisfaction with and ambitions for their technological capabilities. Across all of the 53 capabilities for which the respondents were surveyed, just 68 per cent percent of banks are satisfied with these capabilities overall, while 32 per cent are not satisfied. For these capabilities, only 47 per cent wish to "be stellar," while 53 per cent seek to merely "be good enough."
Big data and analytics
Of the banks surveyed, 62 per cent have either always relied on big data in the form of other technologies or have begun embracing it. This technology is just now being considered at 35 per cent of banks, and among all the examined technologies, it is the capability with which banks are most likely to be dissatisfied and for which they are most likely to plan an upward level of spending. Multichannel integration, a strong complement to both data management and analytics, remains a major pain point for banks; just 39 per cent of banks expressed satisfaction with this capability.
Despite cloud computing's ability to reduce upfront project costs and make ongoing technology costs align more closely with underlying usage levels, banks remain timid about the cloud. Only 11 per cent say they are embracing it aggressively, while a relatively high 20 per cent intend to stay away from cloud computing.
Risk and compliance
Despite increasing demands related to capital adequacy testing, an uncertain credit environment, and increasingly aggressive fraudsters, banks are nonetheless relatively satisfied with their risk and compliance capabilities. As a group, these capabilities invoke satisfaction at 72 per cent of banks.
Digital wallets and payments
Though generally satisfied with their payments capabilities overall, banks are least satisfied with their capabilities for consumer digital/mobile wallet payments. A competitive answer to the Squares and PayPals of the world and a badly needed deterrent to disintermediation, this capability invokes dissatisfaction at 72 per cent of banks, and it is yet to be implemented at eight per cent of banks.