IT budgets in the global retail banking industry will reach $131 billion in 2015, an increase of 4.3 per cent over the previous year, according to Ovum. This will rise to $157.6 billion by 2019. This is driven by improvements in the global macroeconomic outlook, which has caused banks to focus on growth, rather than cost reduction and compliance-centric projects.

The trend of investment in digital channels will continue this year. Mobile banking will see the largest increase in budgets, with a growth of 7.3 per cent over 2014, seeing total spend reach $4.2 billion this year. Online banking will rise by seven per cent, but its total spending will be higher than mobile, reaching $10.8 billion in 2015. As the industry’s focus on sales and servicing remains strong, multi-channel integration and customer information systems (MI/CIS) spending will see a global growth rate of 5.6 per cent, pushing this year’s total to $7.3 billion.

“Data and analytics will be key to the developments in digital channels,” says Kieran Hines, practice lead, financial services technology, Ovum. “Many markets are witnessing their second or third wave of mobile and online banking platforms, with driving revenue becoming the prime priority. In the next round of major platform developments though, it will be the use of data analytics in real-time that will act as the key differentiator.”

This change will be reflected by the spending growth in core platforms. In 2015, this will remain a critical investment, with retail banks spending $22 billion on core banking projects, an increase of four per cent from 2014 and it will continue to grow, reaching $26.2 billion in 2019.

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