A recent article published by the American Banker gives insight into the top ways that banks will spend their 2014 IT budgets. Here are the top 8 spending categories:
- Digital banking and mobile payments: According to the article, banks are expected to spend 6.8% more on digital banking in 2014 than they did in 2013. This includes digital wallets, mobile banking, and tablet apps.
- Marketing analytics, supported by customer data management: Banks plan to spend an average of 5.7% more on data related technologies, such as data mining, data warehousing, and online analytical processing. This will allow banks to get closer to consumers, learn more about them, and reach them more efficiently. The most important thing to note is that banks will be able to use real-time customer and transaction data to create targeted messaging, offers, products, and prices tailored to individuals.
- The “omnichannel” experience: The term “omnichannel” refers to the seamless, synchronized interaction across all consumer touch points. This is different and arguably more important than multi-channel, which means banks provide outlets through multiple channels. Syncing the experience across all channels will provide better customer satisfaction.
- Core banking technology: Banks will spend about one-third of their IT budgets on core technology. This is a 4.2% increase compared to 2013. It is expected to continue to increase in the coming years because many banks have legacy core systems that will be more expensive to maintain over time.
- Private clouds: Banks are beginning to implement software for sharing files across multiple mobile devices. Documents are shared from a central location, avoiding version control issues.
- Efficiency: The article states: “Already this year, U.S. banks accelerated their adoption of document management, workflow and business process management software to turn time-consuming, paper-bound processes into simpler, web-based tasks.”
- Security: Security spending will likely increase in the New Year. Banks claim it’s difficult to obtain a direct return on investment, so it’s not always the top priority.
- Compliance and risk management: Many banks invested heavily in compliance and risk technology in 2011 and 2012. These banks are now spending more money trying to find ways to benefit from these investments.