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Big data analytics ‘a top priority’ for banks
Advanced business intelligence and big data analytics solutions have been named as a greater IT priority for enterprises in the banking sector than traditional key issues such as security.
This is according to a new study by Ovum, which revealed analytics was identified as the number one area of focus for 2015 by 29 per cent of financial institutions, compared with 28 per cent that stated they would be primarily concentrating on security this year, Computer Weekly reports.
The research observed that analytics will be particularly important to banks as they look to cope with the demands placed on them by rapidly-maturing online and mobile banking solutions.
Ovum stated that many consumer-facing organisations are currently dealing with the second or third wave of these platforms, which is leading to goals such as enabling self-service offerings and boosting integration with the wider channel estate becoming secondary to the need to drive revenue.
“The ability to use data analytics in near real time to deliver customised and highly contextualised marketing messages, offer management, and other communications, will be the key differentiator in the next round of major platform developments,” the company said.
IT departments will have an increasingly important role to play in driving banks’ strategies in the coming years, which is reflected in the increased budgets they have to work with.
Ovum found two-thirds of the 582 retail banks it surveyed plan to boost their IT budget in 2015. Overall, IT spending by the banking sector is set to rise by 43 per cent year-on-year in 2015. A total of $131 billion is expected to be spent this year, with this figure set to grow to $157.6 billion by 2019.
The research firm said: “With retail banking firmly in growth mode, the need for innovation is stronger than ever. Many of the current disruptive forces in the industry, such as mobile, social media and as-a-service delivery are IT-centric at their heart.”
Senior business executives at these firms will look to their IT departments to take a leadership role in assessing the impact of these changes and devised the most appropriate response. In the coming years, many professionals will see their roles change to work more closely with product and strategy groups to drive innovation.
However, Ovum warned that while using technologies such as real-time analytics to modernise customer service solutions and other aspects of a bank’s IT environment can bring many benefits, it will be important for businesses to take a long-term view of the goals they wish to achieve.
“In the rush to deliver product innovation in the front office to drive growth, banks must resist the temptation of short-term, siloed developments that deliver quick revenue wins,” it said.
Ovum explained that as customer expectations continue to evolve, banks need to build and retain agility in the back office in order to deliver the innovations needed in the future.