The increasing levels of technology investment in transaction banking reflect the importance of these business lines. We recently conducted an online survey of global transaction banking (GTS) executives, focused on organizational investment priorities for the next 2 years; including delivery channels, back office systems, risk management applications to support cash/treasury management, and trade finance.
68% of GTS respondents are increasing technology spending over the next two years, by an average range of 10-15 %. Technology has evolved at a rapid pace during the past five years, certainly faster than many financial services institutions’ (FSIs’) ability to keep pace. Getting ahead of the technology curve is the ambition of forward looking FSIs.
The theme across multiple technology initiatives being pursued includes consolidation and integration of existing platforms for use across products and functions. The focus on modernization of banking platforms is brought about by decades old legacy systems. This is coupled with technology gains and the need to support multi-regional or global banking activities. FSI executives have been conducting enterprise systems and process reviews to determine the best methods and highest priorities to meet these challenges. Some questions they have been asking themselves throughout this process are:
- What are the most fundamental changes necessary to effectively compete in the new age of banking?
- How do we manage and capitalize on the incredible growth of data?
- Can we afford to develop and manage products internally?
The survey findings also open a window into generally robust levels of expected investment as more than 60% of respondents are increasing technology spending over the next two years, by an average range of 10-15 %. The findings also indicate how GTS technology/process delivery models are undergoing a transition from internally developed solutions/enhancements to more collaborative approaches between technology vendors and banks. We believe that the survey results provide both institutions and technology vendors with some clear leading edge validation for ongoing strategic investments in transaction banking.
Look for our research discussing the detailed results of the 2011 GTS Technology survey.