Bank Systems & Technology showcased the results of its 2013 Banking IT Outlook Survey during a discussion at our annual Executive Summit in Phoenix. The survey asked respondents to make some predictions about their IT spending and some challenges that they will be facing over the next couple of years.
The good news for those working in banking IT from the survey is that very few of the more than 50 respondents to the survey expect they're IT budget to decrease in 2013 from this year. Most of the respondents said there would be an uptick in their budget, with more than 36 percent forecasting a modest increase of less than 10 percent. Another 28 percent of the respondents were expecting an increase greater than 10 percent. That optimism was cautiously mirrored by attendees at our annual Executive Summit. The majority of them also predicted an increase in their IT budgets of less than 10 percent.
"Right now there are just some areas where you have to invest," guest speaker Gwenn Bezard, , co-founder and research director at Aite Group, a consulting firm, told the audience at the Executive Summit. "For instance, with fraud management, cybercrime is increasing. There's just not a lot of room [in IT] to cut."
Core systems seemed to be the biggest area of IT spending, with more than more than 36 percent of those surveyed predicting that to be their biggest spending item, followed by mobile banking and customer experience. New products and services got the most votes for the category that institutions would spend the most of their money on, garnering 36 percent of the vote as well. IT and business transformation followed closely with 33 and 28 percent of the vote, respectively.
Beyond spending, most of the respondents said that they were somewhat confident that their institution can recruit and maintain top IT talent. The majority of attendees at the summit responded similarly at the Executive Summit. But Aite Group's Gwenn Bezard noted one of the benefits of some of the core systems replacements that many of this year's Elite 8 honorees had recently managed at their institutions was a reduction in the need for staff with legacy skills. "With a more modern core banking system, you don't have to try to retie talent as hard," he noted, adding that many banks now get a significant portion of their IT staff from IT firms and vendors.
The survey respondents and attendees at the summit seemed to diverge in their opinions on which channel presents the greatest challenge in providing an optimal customer experience. Among the survey respondents mobile seemed to be the biggest challenge, receiving 40 percent of the vote. But half of the attendees at the summit who were asked the same question said that social media was their biggest challenge in this area. Regardless of which channel presents the biggest challenge, banks seem to continue to be investing in building their individual channels more than in multi-channel integration, Bezard said, citing research by Aite Group. "Despite the momentum behind multi-channel, most banks are more interested in filling out their separate channels," he explained.