Agility is one of the standout technology priorities for retail banks this year. While the operating environment remains challenging, many banks are focusing on how to move at pace to capitalise on new opportunities.
In part this reflects the broader cultural change underway in the industry. The growth of the fintech sector has undoubtedly catalysed fresh thinking among incumbent institutions about delivering product enhancements and innovation. The pace of the adoption of cloud technologies, surge in activity around AI, and investment in open ecosystem projects this year all underscore this shift in attitudes. In addition, many are actively experimenting with technologies such as Generative AI.
These priorities are reflected in a clear emphasis on technology investment. Financial institutions of all sizes report steady growth in their IT budgets this year, which are expected to increase by 3.6% on average. Sentiment about 2024 suggests that technology spending will increase again, and by a greater amount, next year.
To shed light on the strategic and product-level technology priorities of the industry, Celent has once again run its Technology Insight and Strategy Survey. In capturing the insights and opinions of 228 senior executives across the industry, we have a granular view on the leading technology priorities for the year ahead, as well as the products and processes that will see the greatest change.
Key findings include:
- 75% of retail banks report that it is more challenging to win and retain customers than it was 12 months ago
- 57% of banks cite delivering greater speed and agility as one of the three most important drivers of their technology strategy
- 45% are investing in improvements to their digital account opening experience, making it the most common product investment priority
- 75% now have a clear strategy to engage in the open ecosystem (open banking, BaaS, embedded finance)
- 41% of banks are currently evaluating or testing Generative AI
The lessons for the industry are clear. Funding innovation is a major strategic driver for banks across all regions. Those that keep up invest risk falling behind the market.
