IT investment is still a top priority for banks, according to a survey conducted by audit firm KPMG.
When asked to identify the three areas where their bank would most increase spending over the next year, 54 percent of those polled indicated IT would be the number one area of investment, followed by regulation and control environment at 44 percent, and geographic expansion at 37 percent.
According to KPMG, leveraging data to optimize customer development was identified by 41 percent of the banking executives as the most important IT-related project for their bank in the next year pertaining to customer growth, followed by investing in and leveraging mobile banking and payments at 33 percent. Leveraging data more effectively for regulatory requirements and platform simplification were each identified by 32 percent of the banking executives as the most important IT-related project for their bank in the next year pertaining to infrastructure and compliance.
“Banks are becoming more actively engaged in using data and analytics to extrapolate insights that help improve risk management and compliance, drive customer growth, increase operational efficiency, develop and refine product offerings, and more,” said Judd Caplain, KPMG’s Advisory Industry Leader for Banking and Diversified Financials in a statement. “We expect this trend to continue as banks hire more data and analytics experts that can utilize information to help enhance business functions.”
Meanwhile, those polled pointed towards regulation as the top impediment to growth over the next year. Thirty-five percent of respondents said that bank management will be spending most of its time and energy over the next year on initiatives related to navigating significant changes in the regulatory environment, compared with 18 percent in last year’s survey. Seventy-two percent identified regulatory and legislative pressures as the most significant barrier to growth over the next year, while 77 percent said political and regulatory uncertainty posed the biggest threat to their bank’s business model, according to KPMG.
The KPMG survey was conducted in the spring of 2013 and polled 100 senior executives in the banking industry. Based on revenue in the most recent fiscal year, 58 percent of respondents work for institutions with annual revenues exceeding $10 billion, 23 percent with annual revenues in the $1 billion to $10 billion range, and 19 percent with revenues in the $100 million to $1 billion range, said the firm.