Financial institutions are looking to prioritise mobile banking, payments, compliance and core banking when it comes to upgrading technology in the coming year. Banks will need to take account of consumers’ increasing use of mobile and tablet platforms and put greater investment into improving these platforms. Fiserv’s Steve Tait reports
Investments in mobile banking and payments, compliance and core account processing systems will drive financial technology upgrades in 2014 among global financial institutions, indicative of the continually growing and omnipresent role of technology in banking.
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Consumer behaviour is changing, and the ability to access accounts and make payments from any device at any time is becoming the expectation, rather than the exception. In response, financial institutions must continue to enhance mobile technology to diversify revenue streams, ensure compliance and remain the one-stop shop for consumers’ financial transactions.
Mobile banking and payments investments on the rise
The rise of the mobile channel has prompted a wave of innovation in financial services. More and more consumers are using their mobile phones for financial activities – mobile check deposit, account alerts and social payments, to name a few.
Fiserv surveyed global financial institution executives at the 2013 Sibos conference in Dubai, and found that 83% of respondents plan to increase their organisation’s mobile banking and payments investments during the coming year.
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By GlobalDataNearly one in three expect their technology investments to increase by more than 50% compared to 2013, and only 17% expect their budgets to remain the same as in 2013 or shrink.
Some of this investment will undoubtedly go toward further development of tablet banking capabilities, as an overwhelming majority of financial institutions view tablets as an extension of the mobile or online channel.
However, to capitalise on the way consumers use tablets, financial institutions should consider tablet banking as a new, distinct channel.
By creating a dedicated tablet strategy, financial institutions can respond to the growing trend of tablet banking. Delivering an app-driven, fully functional tablet experience that complements all channels will result in sustained customer growth and improved financial performance.
Focus on compliance
2014 also looks to be one for significant investments in compliance operations. Financial institutions’ plans are well underway to be ready for important approaching deadlines for Basel III, the Foreign Account Tax Compliance Act (FATCA) and the Single Euro Payments Area (SEPA).
More than half of survey respondents said they plan to increase their institution’s compliance budgets by at least 25% and one in five intend to increase compliance spending by 50% or more.
The cost of upgrading compliance systems can be a concern or roadblock for financial institutions. However, institutions can turn to cloud services, enabled by recent developments in new technology, to keep pace with evolving regulatory mandates while keeping costs down. Banks that embrace cloud technology will have the tools to improve compliance and be better positioned to weather market volatility and harness emerging opportunities.
Everything ties back to core banking
Given the industry dialogue during the last several years, the growth of investment in mobile banking, payments and compliance is to be expected, but core processing has not been left out in the cold. Nearly half of survey respondents revealed that they anticipate a significant upgrade or replacement of their organisation’s core account processing system within the next two years.
To stay competitive, financial institutions need an underlying advantage to drive efficiency, mitigate risk, promote growth and enhance the customer experience.
Banks must have the flexibility to either integrate all transaction channels with the core or to provide select best-in-breed channels. An upgraded core processing platform enables banks to achieve sustainable growth, both in revenues and customers, and to provide the personal banking experience customers demand.
Many financial institutions are re-examining their business models and planning greater technology investments for 2014 – with an increased focus on mobile, multi-channel technology, compliance and customer-centric products designed to offer a personalised banking experience.
These areas of focus indicate that financial institutions have moved past the uncertainty caused by the economic crisis and toward a future where real-time, on-demand technology will play a key role in sustaining growth.
Steve Tait is International Group President, Fiserv
