Consumer experience and operational efficiency remain key areas of concern in The Global Retail Banking IT Market. It was presumed that IT offerings in Retail Banking reached a zenith, until new technological challenges showed up. Eager to maintain their competitive edge, retail banking functions are looking at IT spending, to overcome these hurdles.
Banks are under tremendous pressure to differentiate in terms of products and services. Their willingness to embrace cutting-edge technology is making IT majors revamp their offering to include big data, analytical technologies, online banking, mobile banking, and channel management. IBM has started delivering big data analytic services while HP continues designing new solutions for the Security, Mobile, and the Big Data sectors
Increasingly, companies are looking at servicing retail banking channels like mobile and internet. This brings enormous amount of data which retail banking functions seek to use. IT intervention, though hugely sought after, is still lacking in many aspects. Analytics, on data collected from mobile devices and internet, holds the key to the future of customer service in this segment.
Covering some of these challenges faced by IT companies, Technavio analysts bring you 4 key insights on Retail Banking Markets.
Ability to Adopt New Technologies in Less Time
One of the greatest challenges of Retail Banking IT Spending is to bring new technologies to the market fast enough to retain and grow customer bases.
A gradual shift in customer behavior as well as emerging technologies is changing customers’ expectations from retail banks. This is creating challenges and game-changing opportunities for institutions that can obtain new growth-enabling technologies to market quickly.
Nowadays, customer experience is fuelled by data, for instance, the time taken from collection to insight and from insight to action. Technology capabilities do exist but banks requires quick implement. Agility in providing differentiated services to banks is a critical area that IT companies seek to improve upon.
Meet Diverse Customer Demands
As consumers become increasingly technology savvy, banks are changing their approach to digital platforms. Customers have become accustomed to having technology at their fingertips. Hence, anticipating where the market is heading to, innovating ahead of competitors while meeting security and regulatory compliance is becoming a major challenge for banks. Retail banking would need to focus on structures that are scalable yet nimble and able to support future growth and the increasing needs of customers.
Lack of Security in IT Transactions
Unsecured transactions on the internet are often cited as the single major deterrent to the rapid growth of IT spending among financial institutions. Although much progress has been made in terms of security, the internet still poses a considerable risk for commercial transactions.
Therefore many customers, mostly from the less developed economies of the world, are reluctant to shift from traditional banking channels to the new-age technology of touch mode and mobility because of the lack of secure payment gateways. The way the internet has been fundamentally designed leads to various security issues. However, increasing the number of authorizations at various levels can eliminate such problems to some extent.
Adherence to Regulatory Changes
A changing regulatory atmosphere is affecting the growth of IT spending by banks significantly. It is also affecting banks’ financial performance and increasing M&A. The biggest challenge faced by IT departments of banks is in meeting and complying with various regulations such as the Dodd-Frank Act in the US and Basel III globally. The high cost of building such necessary compliance systems and the increased capital requirements have weighed retail banks down.
Thus, the new regulatory environment has caused retail banking functions to re-evaluate their business models.
