WHAT’S IN STORE FOR 2015:  FOUR MAJOR IT-TRENDS THAT WILL SHAPE BANKING

Sriniketh Chakravarthi, Vice President, Head of Banking and Financial Services – Continental Europe, Cognizant

Working with global banks on a day-to-day basis, I sense a lot of excitement across four areas in particular that not only intrigue me personally, but which I feel will further shape banking in 2015.  These areas are: digitisation, regulatory compliance, IT infrastructure simplification, and cyber security.

Banking digitisation will continue

As enhancing customer experience remains a key focus area for banks, investments in online and mobile first channels will continue to grow. In fact, mobile banking solutions will be the top investment priority, with banks spending USD 2.3 billion in 2015, according to CEB Towergroup’s report on “Mobile Banking Solutions”.  Mobile payments technology is already on its way to being the next major turning point and mobile payment options are at the heart of the fast-developing hyper-connected world. We will see more banks offering mobile -specific features such as geo-location and voice identification. According to a report released by Juniper Research, the annual global market for digital payments will grow to $4.7 trillion by 2019, almost double the $2.5 trillion expected for this year.

Focusing on risk, compliance and regulation

Further major regulations are on their way, including Basel III and the EU General Data Protection Regulation (GDPR); ensuring compliance with such legislation will remain a major area of investment for banks during 2015. The increased regulatory burdens will require banks to take a more proactive, enterprise-wide approach to managing compliance issues. For example, banks are focusing on developing automated processes for reporting to reduce the cost and risk associated with new regulatory demands.

Simplifying IT architecture and renewing core applications through cloud adoption

In the coming year, banks will seek to simplify their IT systems across the infrastructure and renew many core applications, such as reducing the number of electronic payments systems and data stores and further investment, for example, the introduction of a common data platform for analysis and reporting. Banks will continue to drive a cloud adoption agenda. Small and medium size banks will look to implement entire core banking platforms as a service while large banks will look to migrate non-core services such as HR to the cloud. In the next five years, 50 percent of new banking applications will be cloud-based, according to IDC.

Enhancing cyber security

Protecting customer assets by managing customer data, authentication, and device security is becoming more important as banking goes mobile first. To enhance cyber security, banks are consolidating fraud management applications and choosing big data platforms that allow real-time analytics for purposes of rapid fraud detection. With near real-time monitoring capabilities banks can detect and prevent anomalous transactions on debit and credit cards or online banking, thus utilizing the value of big data by preventing losses while also meeting requirements of instant transaction processing.

In 2015, more banks will start treating big data as an important strategic growth opportunity and adapt to that insight by creating new business roles such as the Chief Data Officer (CDO). As managers and enablers of data mining, the Chief Data Officer focus is on strategies that embrace digitisation, develop big data analytics capabilities and meet the demands of regulatory challenges.

As a mature banking market, the UK is already seeing signs of these trends and customers here expect their banks to use their customer data to improve service and offerings. Bank customers will be pleased to hear that focus on digitisation, regulatory compliance, IT infrastructure simplification and cyber security will ultimately enhance the banking experience in 2015.

Read Next ...
load more

1 thought on “WHAT’S IN STORE FOR 2015:  FOUR MAJOR IT-TRENDS THAT WILL SHAPE BANKING

Comments are closed.

 

Send this to a friend