Increasing investments into data transformation suites shows the new value of banking data
According to a recent IDC survey, Role of Technology in the Banking Industry, 83.2 per cent of banks in Asia/Pacific will increase their technology budgets in 2023, with 14.8 per cent signalling they will increase their budgets by 20 per cent or more. The IDC survey also revealed that security and data transformation will be the key focuses of technology investments in 2023, with 80.4 per cent of banks planning to increase their budgets in security/identity and access management, followed by big data & analytics (68.4 per cent) and artificial intelligence (AI)/machine learning solutions (64.6 per cent).
These priorities reflect an urgency for banks to address the rapidly escalating landscape now driven by institutionalized threat actors with AI-enhanced tools to combat security risks. Increasing investments into data transformation suites also reflects the new value of banking data as a significant commodity and driver of new revenue, where establishing new analytic frameworks and methodologies can offer banks immense advantages over their competitors.
IDC’s key findings from the survey include:
- The largest pain point for banks when navigating digital transformation is in maintaining stability and minimizing downtime (47.8 per cent), followed by managing operational risks of migration (43.7 per cent).
- In the next 24 months, APeJ banks are prioritizing the enablement of third-party integration (50.0 per cent) and innovating corporate banking products via API (48.1 per cent).
- In the next five years, 70.6 per cent of banks believe that their ESG strategies will positively impact their profits.
“The banking industry is always situated at the forefront of constant innovation, amidst challenges posed by global economic uncertainties, emerging competitors, and ever-changing customer demand”, said Adam Kamarul, Market Analyst at IDC Financial Insights. “The priorities set by the banks in 2023 serve both as a guidance on where banking is headed next, and a signal for the types of technology innovations that will take place.”
The IDC survey, IDC Banking Survey Asia/Pacific 2023: Role of Technology in the Banking Industry — Sentiments, Priorities, and Considerations on Technology Investments, polled 316 banking decision-makers from Australia, China, Hong Kong, India, Indonesia, Malaysia, New Zealand, Singapore, and Thailand. The survey explores the banking industry’s considerations and priorities for technology investments, product developments, and ESG strategies. It also explores sentiment across key technology adoption, which tracks the “buy/build/partner” considerations when sourcing for technologies.