| Asia/Pacific Banks Will Invest in Technology Despite Crisis, Says Financial Insights |
| Press Releases | |||
| Tuesday, 14 October 2008 12:27 | |||
|
Singapore and Hong Kong, October 13, 2008 – Leading independent research and advisory firm Financial Insights, an IDC company, today announces the release of a new report, entitled, "Asian Banks Still Prepared to Invest in Technology Despite Crisis". This report is based on a survey conducted in the Asia/Pacific region as the crisis in the financial industry unfolded, and as bank executives assessed the impact of the crisis on their institutions. The Financial Insights survey, involving close to 70 CIOs and senior IT decision-makers of top banks, highlights how banks in the Asia/Pacific region are still going to focus on investments in technology despite the ongoing crisis in the financial services industry. A clear majority of Asia/Pacific bank CIOs expect IT investment budgets to grow in 2009. Figure 1 below presents the high-level results of the survey.
Figure 1: IT Investment Growth Expectations in Asia/Pacific Banks Michael Araneta, senior research manager, Financial Insights Asia/Pacific remarks, "We cite strong growth projections, but we also note significant shifts in the drivers of IT investments. Clearly, cost management has quickly risen to the top of the agenda. We see this in banks' intentions to closely scrutinize where investments are being made, and to more thoroughly define the intended benefits of IT projects. The first and easy recourse in the drive to cost management is to cut discretionary spending, especially in spending on telecommunications and hiring of contract staff." Financial Insights notes that an increasing number of projects relying on the synergy of multiple technology and business areas have been put on hold. With lines of business taking on a defensive stance, the momentum to think "long-term, enterprise-wide and strategic" has, to some extent, been stalled. Michael further comments, "IT initiatives that ensure the availability andperformance of the bank's existing technology infrastructure will be a key area of focus. These will be where significant IT dollars are being spent. There is a growing focus on platform standardization, security an counter-cyclical solutions such as risk technologies, collections and recovery systems, credit scoring systems, and portfolio and exposure analytics." Technology vendors have responded to the crisis by meeting the cost management agenda of their clients. This can be seen in changes to how contracts are structured. Services are converting headcount-linked contracts to fixed-price contracts. Contract payments are also being staggered through a longer time horizon. Shawn Yip, market analyst, Financial Insights Asia/Pacific adds, "One other significant impact we have seen from the crisis is the availability of more A-Teams and mid-level to senior management personnel for Asia/Pacific projects. These executives were up to now tied up in huge, transformational projects in more mature markets in Europe and in the US. Even if contracted fees are maintained, and especially if contracts are set to a fixed price basis, the involvement of more experienced personnel in projects give an implicit price cut for Asia/Pacific clients. They get more experienced people at lower fees."
|
