A new report put out in early November by IDC Financial Insights Asia Pacific indicates a brighter future for Singapore-based banks as they readjust their technology investment plans.
The banks’ plans for 2010 show the return to long-term transformative projects, and reflect a more positive outlook for Singapore’s financial sector. These projects, notes IDC, require significant investments in terms of IT dollars, time and personnel. They will also need to spend a significant amount of money on IT management resources.
Banks will use IT to retain customers
Some of the highest planned IT spending are for projects concerning risk management, operational efficiency and data centre consolidation, according to Michael Araneta, senior consulting and research manager at Financial Insights Asia Pacific. This marks a shift in IT priorities from the last two years and Araneta attributes this to the return of projects covering core banking, multi-channels and customer experience.
This change in focus will help banks to re-evaluate their existing customer satisfaction plans. The banks got a chance to do this in recent months while the world struggled with tough economic conditions. Financial Insights said these banks focused on protecting existing customer bases.
“As recovery takes shape, banks are reverting to initiatives that focus on achieving a single customer view to expand their customer base and increase their share of the wallet,” said Araneta. “They are thinking about other addressable markets. In addition, in the year ahead, banks will focus on customer accessibility and instant fulfilment at the customer touch points.”
Small banks will invest more on IT
Small, representative banking units in Singapore are expected to show the highest IT investment jumps in the market by virtue of a low investment base. The report says these banks will invest in discrete solution areas ranging from connectivity to their home core banking systems, remittance, anti-money laundering to compliance.
IT spending by large global players has been forecast to comprise about 65 per cent of total spending in the market in 2010. Huge investments in infrastructure will enable these giants to use Singapore as a hub to serve customers in Asia and elsewhere.
Financial Insights emphasises that banks have to quickly adapt to international best practices in IT strategy and IT management.
“Vendor incumbents in other markets will have to build their presence and domain expertise in Singapore, which foreshadows an expansion of IT vendor teams and a greater push towards effective vendor ecosystems in the island,” said Araneta. “Furthermore, the Singapore-based IT executive will become more influential, not only in regional architecture issues, but also in keeping a significant hold of investment dollars.”
The ‘Market Analysis: Signals of Recovery in Singapore Banks’ IT Investments?’ report is based on input from senior IT and line-of-business executives from 15 Singapore-based banks who attended the recent IDC Financial Insights Banking Roundtable. The study also considered follow-up research on IT spending undertaken by the research firm’s analysts in the region.
