Innovation, Cost Efficiency Drive Retail Banking CIO Agendas

IT budgets are under pressure across the Australasian retail banking industry. While CEOs are mainly focused on agility, customer centricity, mobility, and digital innovation, Ovum finds that cost and efficiency continue to be the key considerations for investment decisions across the industry.

In a new report, Ovum examines the major issues in retail banking from different functional levels and perspectives. The independent technology analyst firm found that cost and efficiency rank highest on CIO and CEO agendas.

Denise Montgomery, Ovum’s Research Director Financial Services and author of the report, said, “Agility and improving customer experience were highly ranked by CEOs and CIOs. However, cost and efficiency remain the underlying focus.”

Efficiency and cost management continue to be the key decision-making criteria for any large investment in capability or innovation. As a result, banks are returning to functional centralisation and rationalisation of duplicate processes and activities. With investment priorities increasingly favouring online processes and products, large back-end, enterprise-level initiatives are being deferred due to cost management concerns.

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Montgomery adds, “Outsourcing and offshoring are still on CIO agendas, and are seen as key strategies in reducing costs and improving efficiency.”

“Most banks are also building regional hubs, and enterprise-wide programs are being cut in response to cost pressures,” he concluded.