IDC says digital projects to drive IT budget among Asian FSI
In a survey poll of 650 delegates attending IDC Financial Insights' eleventh annual Asian Financial Services Congress, 40 percent of respondents indicated that IT budgets are expected to grow over 10 percent in 2015 with digital projects driving spend. Only a third of attendees to the congress are expect their IT budgets to stagnate or contract within the fiscal year.
According to IDC, the C-suite of the Asia/Pacific banking and insurance communities are found to be aligned in their opinion on technology investments for the fiscal year. “The region has been a reliable source of growth for technologies that supported core banking systems, general ledgers and charts of accounts, credit origination systems, and traditional channels,” said Michael Araneta, Research Director, IDC Financial Insights.
The result is that Asian institutions now have the youngest core systems globally, and this has been corroborated by 32 percent of delegates to the IDC Financial Insights event having admitted to owning related IT assets which are less than seven years old. In contrast the median age for European and North American core banking systems are 12 and 20 years respectively.
With business agility high on the agenda, three in every five institutions are found to be committing themselves to private, hybrid and public Cloud investments for the upcoming year, breaking the years-long indecision that has permeated the industry.
"Combined with the solidification of the ASEAN Economic Community charter, greater affordability of IT in the enterprise and consumer space, as well as the rise of regulators as enablers rather than inhibitors of innovation, we believe the significant shifts in IT investment witnessed over the past years are a strong reflection of future trends, and ultimately, of our financial sector's growing maturity in reconciling 3rd Platform technologies with day-to-day operations," says Sui-Jon Ho, Market Analyst at IDC Financial Insights.
Araneta says that the masterplan for many banks is to become ‘less local and more regional’ with super regionals targeting to generate at least 50 percent of their revenues outside of their home markets by next year. However, he cautioned that this 50 percent target will be illusive for many including the most aggressive of banks.
IDC expects superregionals and the large tier 1 domestic banks will have a higher than usual IT budget for 2015 because they are more determined to transform and innovate.