Forecasting a compound annual growth rate of 12% per annum, BMI-TechKnowledge says the total IT in banking spend in SA will grow from R4.5 billion in 2000 to over R10 billion in 2007.
In its first market report highlighting key IT trends and issues in the SA banking industry, BMI-T says system integration and business intelligence are two of the primary IT drivers in the sector.
The report attributes the increase in spend to currency depreciation and inflation, as most banks have indicated flat growth in expenditure on new development.
Miranda van Rensburg, BMI-T analyst and report author, says banks are maintaining their commitment to IT spending even in the tough economic environment. Van Rensburg believes the main driver is a broader market understanding of the intrinsic value that IT can offer in a hugely competitive market space.
"The quest for higher levels of efficiency and customer service are also a key priority for South African banks. Customer demand and fierce rivalry has led banks to focus mostly on improving front-end capabilities. However, the demand for multi-channel offerings as well as new risk requirements have resulted in focusing on the integration of core processes," she says.
According to the report, IT spending will continue in the banking arena. However, BMI-T expects that banks will become more astute in their IT spending and evaluate expenditure more closely by spending on simplification and cost reduction processes.
BMI-T believes the biggest opportunities in this sector will remain in back-office integration as the SA banking sector continues to streamline internal processes, and in business intelligence to help banks understand more about their customers.
Companies that are able to assist maximising productivity and increasing strategic gains will benefit in the long-term, says BMI-T.
Share
