Banks and fund managers are, reportedly, changing priorities and focusing on better customer-centric IT solutions to gain market share, after years of technology investment focused on developing infrastructure.
Colonial First State (CFS) general manager of product and investments, Peter Chun, told Financial Standard that technology is going to be "paramount" for the industry.
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Technology budget spent on infrastructure by CFS, owned by Commonwealth Bank, was 50% in 2006 which dropped to only 26% in 2012. The remaining 76% is going to customer service and adding value to its software, including the wealth management arm of the business.
On 14 February 2013, CBA’s wealth management arm has posted a net after tax profit of $334 million, in its half-year result.
CBA was introducing 1,200 new services and enhancements every month in 2006, but in 2012, the number has doubled, with 3,000 monthly changes.
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By GlobalDataThe National Australia Bank (NAB) revealed a new technology strategy and reported it will invest more than A$1 billion per annum over the next five years to reduce complexity and duplications, to ensure a more effective use of data and analytics.
NAB expects to generate annual cost savings of about A$800 million over the next five years.
Westpac-owned BT Financial Group has only 10% (400 people) of its workforce on developing and improving technology.
Chun, said: "Investing in technology is very expensive and companies often lose capital.
"There is a role for large players and there is a role for smaller players in the industry, but in terms of providing scaled service and supporting advisers, you actually need to have a strong and robust infrastructure," he added.
At Misys’ Southern Asia Market Forum in March 2013, one of the key findings was that Asian financial institutions will keep spending more on technology. Michael Yeo, market analyst, IDF Financial Insights Asia Pacific, commented at the forum that IT spending of financial institutions was up 4% worldwide in 2012. In Asia Pacific, this figure was 7%, notably in the areas of core banking, risk management and CRM.
