Banks spend more on IT, hoping the cloud is silver-lined
By Tom Miles
GENEVA (Reuters) - Two-thirds of banks are planning to spend more on information technology this year, the highest proportion since before the start of the financial crisis, according to an annual survey published on Wednesday.
The survey of 198 senior bankers by banking software firm Temenos also found only 11 percent anticipated spending less on IT this year, the lowest since 2008.
"Historically, and even more in Switzerland, IT was considered as a necessary evil, something that needed to exist because it existed in the engine room," said Pietro Di Gregorio, head of business intelligence at Swiss private bank EFG Bank.
"But as of now, IT has to change its behavior," he said.
Survey respondents considered customer loyalty their biggest challenge, cited by 30 percent. This worried Asian banks more than their European counterparts and they were also keener to invest in IT-related innovations to help them retain clients.
Private banks were second only to retail banks in worrying about customer loyalty - and with good reason, said the survey's author, Temenos' chief strategy officer Ben Robinson.
Younger tech-savvy clients "have zero interest in banking the way their parents did", he said. But banks must spend wisely to avoid their IT infrastructure turning into a spaghetti-like mess.
"They need to clean that whole thing up if they are going to be successful in the digital age. But instead what they tend to do is they say 'Customers want access to the bank through their mobile phone', so they build specific applications for those without dealing with the underlying mess." Continued...