Asia-Pacific Banks Intensify Search for New Markets in 2013

Asia-Pacific banks in 2013 will intensify their efforts to tackle the largely unbanked segments of the population in China, India, Vietnam, Indonesia, and the Philippines; create trade finance and cash management propositions for the Asia-Pacific corporate and SME market; and build strengths in retail and cross-border payments.

 

These were some of the findings revealed in a recently published report by IDC Financial Insights Asia Pacific that presents the top 10 trends expected to impact business and technology decisions in the upcoming year.

 

“Global banks will also strive to be seen as ‘more Asian’, which can spur regionalization initiatives and engender a real pursuit of the Asia/Pacific market,” says Michael Araneta, consulting and research director for IDC Asia/Pacific.

 

"Banks will align their strategies to attempts by Asia/Pacific economies to further decouple from troubled Western economies, and search for sources of growth that originate from the region,” says Araneta.

 

Several trends from the list of IDC Financial Insights' top ten predictions point towards a dynamic market in the region in the year ahead. The top ten predictions for 2013 are:
 


1. The industry finds new growth markets in the Asia/Pacific, sustaining the region’s growth story.

 

2. IT Spending recovers, but investments in risk management still dominates.

 

3. Regulatory clarity spurs further adoption of Cloud Computing, but private cloud is still the preferred model.

 

4. Regulatory convergence makes it easier for Asia/Pacific super-regionals.

 

5. The number of operational outages increases, creating a new set of drivers for core banking replacement.

 

6. Non-bank financial institutions win the first round of the mobile wars by seizing first-mover advantage.

 

7. Social media finds more use cases outside of marketing and advertising.

 

8. Banks’ internal skills will need to catch up with the maturation of Big Data technologies to take full advantage of the Big Data promise

 

9. “Faster Everything” becomes a prevalent theme throughout the banking organisation.

 

10.Corporate-to-bank connectivity capabilities emerge, creating a new category of Asia/Pacific banks.

 

 

IDC Financial Insights expects banks' external IT budgets to be higher than what was seen in 2012, reaching an annual growth of 8-11%, depending on the market.

 

High-growth segments will comprise a segment of five global players that are growing their Asia-Pacific base, tier 1-domestic institutions that will be seeking a larger ASEAN footprint, and select tier 3 players.

 

Some years-long transformational programs will be launched in 2013, after being held back for too long by a tentative 2012 market. These major projects will push IT spending accordingly, lifting the market for large technology vendors in the region.

 

In the report, IDC Financial Insights also notes that new themes have emerged to drive IT investments in the region. These include regulatory convergence, that has made regulatory positions around new areas such as cloud computing, social media, and Big Data become more clearly articulated.

 

The industry is also anticipating a slew of “Faster Everything” programs that seek to use speed and real-time capabilities as competitive advantages to win and retain crucial customer segments, especially in retail banking.

 

However, Araneta states that the broader area of risk management will still see strong growth as banks spend on specific solutions that allow them to support growth amid weak global economic conditions.

 

“Spending areas around market risk, liquidity management, and asset-liability management will be of high priority. There are also some industry segments and functional IT areas that will see robust IT spending growth. In general, we see healthy IT spending from banks in large, geographically dispersed markets, as well as mid-sized banks that are attempting to be tier 1 players."

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