During the Economic Crisis in 2008, many banks in the Americas and the EMEA region barely survived because of loose lending criteria and outstanding customer lines of credit which left banks with exorbitant debts to settle. Resulting, many were forced to restructure their spending in order to cope with their losses.
The Banking IT market took a huge hit because of this, and while it’s slowly pulling ends back together, it it hasn’t made a full rebound yet.
Despite all of this adversity however, part of the globe was relatively untouched. That being, the APAC region. While the Americas and the EMEA regions struggled, the APAC’s market remained stable because of extremely stringent lending criteria. Since then, it has been growing at an exceptionally high rate allowing for banks increase their own capital investments.
As is such, The Banking IT Spending market has witnessed a huge increase in demand from this region as a result of expansion into retail, corporate, mobile and internet banking—all of which are driving an anticipated CAGR of 5.91 percent for the 2012-2016 period.
With great power comes great responsibility however, and that saying is no exception for the banking industry. The recent expansion into new sectors has put a lot of pressure on banks to manage their resources effectively and maintain high levels of customer service. In turn, this has put pressure on the Banking IT market to develop solutions capable of coping with the growth and expansion of the APAC banking industry.
While the Banking IT Solutions market is riddled with competition, there are only 4 key market players that provide IT services to the APAC region:
- IBM
- HP
- Oracle
- Fujitsu
That being said, between 72-74 percent of the Banking IT Spending Market is comprised of a very high number of smaller companies.
With this amount of dense competitivity, one is forced to ask “how do these 4 main vendors keep their spot on top of the market?” The answer, is specialization. When the APAC Banking Industry began its assault on new markets, IBM, HP, Oracle and Fujitsu all chose to tackle different fronts.
For instance, IBM, the market leader, elected to develop technologies tailored to retail banking, customer marketing analytics and risk management services.
HP, the second largest provides both Banking IT and computing solutions to government, healthcare and education sectors.
Oracle caters to corporate and investment banking needs and lightly dabbles in retail banking.
Last but certainly not least, Fujitsu offers hardware, software and consulting to various banks and have also developed extensible business reporting language (XBRL), which has set the standard for exchanging business information.
By sharing all of these responsibilities in the market, IBM, HP, Oracle and Fujitsu are able to cover more ground by providing solutions to emerging industries. Catering to different crowds in the banking world allows these four major market players to conduct business without stepping on each other’s toes.
Assuming that each of these companies continue this strategy of tackling different industries within the banking IT market, they will continue to rule over SMEs. Breaking up the market into slices will enable Banking IT vendors to focus more on the client’s needs instead of their competition, allowing for more time for improving their technology and services. The number one goal for Banking IT providers is to improve the customer’s business which is why so many banks are investing in this technology. All in all, we at TechNavio are banking on the fact that IT solutions will continue to be a must-have for financial institutions, fuelling market growth for the years to come.
For more information, view our 2012-2016 Banking IT Spending Market in the APAC Region report.
