Tech Trends that will Shape the Banking and Securities Industry in 2015
Banking customers have become much more digital savvy in the recent years, and technology has brought in new competition from non-banks to quickly fit the needs of these people. The banking industry is more reliant than ever on technology for many aspects of their business. Technology is used more and more not to simply sell products, but also to manage internal operations, and control risks. Many of the advances in technology— mobile, analytics, and cloud have a direct role to play in these areas. They enable services from incumbents and new entrants, and improve financial inclusion for the ones not served well by the traditional banking products.
“In the past year, the world’s largest listed company, Apple, has entered payments, and the world’s largest retailer, Walmart has announced that it will offer checking accounts. Non-banks are a growing phenomenon in many parts of the world. While the portion of revenue that non-banks get at the expense of banks is minuscule today, they are growing and creating new services in the unserved areas.” Gartner has projected that the banking and securities industry worldwide will spend $502 bn on IT products and services in 2015, an increase of 2.7% over 2014. IT services, the largest segment at $193 bn, will grow by 3.3%. Software will be the fastest growing segment at 6.5%, and the projected spend is $70 bn.
Among priorities for technologies, analytics retains the top position for the third year in a row, while infrastructure/ datacenter, mobile, and cloud are the others that make up the top four technology priorities for the banking and securities industry. The increased reliance on technology for business goals has increased the participation of business leaders in technology decisions. Considering that I will be working at a banking company in the information technology department next year, this kind of information is pivotal for me to understand and grasp. Banks are continuing to invest in their channels, whether branches, ATMs, online, and mobile. Another huge plus to banking technology is that it also enables newer services to reach a large population, who have not been able to make use of them before. While banks are positioned well to seize the opportunities opened by technology, the future will have many innovative and useful financial services, offered both by banks and non-banks.