The current economic, regulatory and commercial climate can lead to conflicting messages when trying to grasp the challenges and opportunities facing the retail banking technology industry throughout 2012.

Economic growth continues to elude many fragile economies throughout Europe and the West. This, alongside an international context of increased scrutiny and regulation as a result of failings exposed by the banking crisis, provides a difficult context for the world’s financial services industry. The UK is no exception. With dwindling growth figures and the looming regulatory upheaval of a retail banking ring fence, UK banks will certainly feel pressure upon their balance sheets in 2012.

This will of course be a concern for the technology industry. Gartner, an IT research and advisory company, recently predicted that banks’ IT spending in Europe will be 0.7% less in 2012 compared with 2011. This prediction certainly seems to vindicate these concerns. However, despite this difficult context, retail banking continues to provide the technology industry with opportunities, both through regulatory compliance, commercial pressure and consumer demand.

Regulatory compliance provides a medium-term opportunity for the technology sector, as reforms such as retail bank ring fences; account switching and MiFID II amongst others will have to be implemented through changes to people processes and technology. The importance of information management, in this regard, has been highlighted by Martha Bennett VP, head of strategy at analyst house Freeform Dynamics, in her report; ‘Information management in financial services; Data deluge, data desert or both?’. Here Martha Bennett highlights that, “…making sure that the right information is available at the right time to the right people is more important than ever in today’s volatile economic and political environment”. At Intellect we continue to provide a voice for the sector in the important discussions surrounding these reforms, ensuring technology is increasingly accepted as a critical factor in facilitating change across the financial system. 

On a commercial level, there is significant pressure for banks to adapt their businesses to reflect the needs of their customers and the wider economy. The consumerisation of IT has led to increased consumer demand for digital banking services and opportunities for non-traditional operators where consumers are ignored by traditional players. A recent PwC survey has predicted a 2015 tipping point for digital banking, with customers willing to pay for a better digital service. In the UK, almost two thirds of respondents stated they would be willing to pay roughly £4 a month for their bank to store loyalty card information and convert accumulated points into cash. Earlier this year, a report by Datamonitor highlighted opportunities for retail banks to improve strained relations with cynical consumers by providing tools, guidance and a product mix geared towards reducing financial stress. Technological developments, such as mobile banking, are highlighted as key tools in meeting these opportunities. By adapting to meet such demands, banks have an opportunity to stay ahead of the competition and create new revenue streams as regulatory compliance bites. 

The Financial Services Programme at Intellect will look to explore these issues during the next in our series of group meetings; “A 2012 Market Update: Technology and Retail Banking”. Here we will be joined by senior analysts; Martha Bennett, Freeform Dynamics, and Kieran Hines, Datamonitor, in separating hype from reality and demonstrating which areas banks are – and should be – investing during 2012. This will provide an excellent opportunity for members to hear from two senior analysts with exposure to retail banks, on what commercial opportunities the financial services sector will hold for the technology industry in 2012.

Intellect Financial Services Programme
A 2012 Market Update: Technology and Retail Banking
Tuesday 07 February 2012
Breakfast and registration from 09:00, meeting 09:30 – 11.30
Intellect, London WC1B 5EE

Guest Speakers:
Kieran Hines – Practice Leader, Global Financial Services, Datamonitor
Martha Bennett – VP, Head of Strategy, Freeform Dynamics.

If you would like to register to attend, please use our new online booking facility.  You will need to be logged in to the Intellect website to do so – please click here to reset your password (your username is your email address) or alternatively contact Lucas Banach, E lucas.banach@intellectuk.org

Technorati Tags: 2012 retail banking, compliance, Financial Services, retail banking ring fence, technology

Tags: 2012 retail banking, compliance, Financial Services, retail banking ring fence, technology

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