Banks and financial services firms plan to prioritise investment in advanced data analytics, APIs and payment technologies as they increase their IT spend over the coming 12 months, according to new research.
Among the 250 senior decision-makers surveyed by London-based technology company Yobota, 65% said they intend to invest “heavily” in new technology in the next year, with 67% also aiming to diversify the kinds of technology they use.
For 74% of banks and financial institutions, improving the quality of their core technology systems is a priority, while 73% plan to invest in better data analytics to enable more informed decisions and 67% will invest in application programming interfaces (APIs), followed by 65% in payment technologies.
Three-quarters, or 74%, of respondents said their firms are planning to upgrade their website or app to improve customers’ digital experience, with 63% revealing that they will automate customer interactions through the use of chatbots and robo-advisers.
Despite this, the research found that only 48% are confident that they have the right approach to adopting new technology to ensure they can adapt quickly to changing customer demands over the coming year.
This could explain why three in five, or 59%, of respondents said they intend to pursue a partnership with a technology provider to achieve their digital transformation projects.
Ion Fratiloiu, head of sales and marketing at Yobota, said that in order to remain competitive, banks and financial services firms must start to “act like technology companies”.
“Over the coming years, the ability to move quickly and deliver instant, personalised and flexible services are what will stand industry leaders apart from digital laggards.
“Positively, our research shows that the sector is taking note and businesses are investing heavily in new technologies. Importantly, digital innovation is taking place across both customer-facing and back-office platforms – it is often the latter that requires more attention,” Fratiloiu said.
“Investment in APIs, data analytics and the reinvention of core technologies suggests that banks are keen to replace outdated systems with best-in-class technology in preparation for a digital-first future.”
The research revealed that 73% of finance companies are looking to invest in new technology in the next year with a view to improving their ability to acquire new customers, with 67% doing so to increase sales to existing customers.