Retail banks across the globe will see IT spending grow 3.4 per cent, reaching $118.6 billion in 2013. The increase will come as CIOs focus on customer satisfaction and revenue growth. That’s according to Ovum’s latest Business Trends report, which also finds that European banks are lagging behind their North American and Asia-Pacific counterparts, with just 1.8 per cent growth expected, compared to 3.3 per cent and 5.1 per cent, respectively.

Among the digital channels, mobile banking is the clear IT investment priority in 2013, as retail banks attempt to capitalise on the features unique to mobile, such as location-based services. Mobile services will grow four per cent in Europe in 2013, and rise at a compound annual growth rate of six per cent between 2013 and 2017. Overall, spending on online channels in this region (including traditional online banking services and mobile-browser-based banking services) is set to grow 4.2 per cent in 2013. In parallel, to compete in the digital world, a number of retail banks will shift their bricks and mortar marketing activities online.

Elsewhere, the report reveals that credit risk management and data privacy will become key regulatory compliance drivers of IT spending in 2013, with global investment into Management Information Systems predicted to reach $6.4 billion over the course of the year, and $2.2 billion of spending in Europe alone over this year. This accounts for 5.5 per cent of overall IT spending by European banks.

Jaroslaw Knapik, senior analyst, financial services technology, Ovum, comments: “The optimistic signs on the economic horizon are driving the shift away from cost-cutting and towards investment strategies within the retail banking sector. Whilst regulatory compliance has certainly fuelled a significant amount of the investment predicted in our forecasts, it is by no means the sole driver. The level of investment in digital channels gives a clear indication that banks are fully cognizant of the growing expectations of their customers, as well as the opportunities they present.”

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