New analysis from Frost & Sullivan, ICT Market in European Banking Sector – Market Model 2012, finds that the market earned revenues of more than EUR 45.54 billion in 2012 and estimates this to reach EUR 50.90 billion in 2018.
Regulatory compliance, increasing focus on retail banking, and integration of customer interaction channels will necessitate the adoption of ICT solutions. The need for the assistance of technology vendors to ensure the accessibility and reliability of financial services will sustain market revenues.
“Regulations such as the Third Basel Accord compel banks to improve their liquidity management processes, further prompting them to install advanced ICT systems,” said Frost & Sullivan ICT Industry Analyst Mario Fernandez. “Compliance requires banks to consolidate various information systems and install software platforms and applications to gain better visibility of their liquidity positions across different areas of business.”
In addition, the rise in the number of customers using mobile channels and the number of accesses per customer through these channels is leading European banks to expand their mobile financial services. This will require investment in software and IT systems for front-end and back-end offices.
Despite these demands, European financial institutions are also tightening their budgets owing to the bleak economic outlook and higher requirements for minimum capital ratios. Banks’ spending on hardware and telecommunications services is likely to decrease due to the commoditization of these services and the intense competition among ICT vendors.
“Banks are looking for ICT solutions that will meet their needs with minimum impact on financial flexibility,” noted Fernandez. “Therefore, ICT vendors must develop phase-based projects that will allow banks to determine the returns in each phase and record improvements in terms of efficiency and service quality.”
Integrating mobile solutions with banks’ current information systems will also enable ICT vendors to widen their consumer base in the European banking sector.