Abstract
The global credit crunch and consequent turning off of the liquidity taps
provides a sobering backdrop against which to examine the likely technology
initiatives in Europe this year. However, Financial Insights' strategic
predictions for 2008, continues to reflect optimism, despite some words of
caution, and highlights some areas of IT investment that have shot up the
league table as a result of recent events.
"Customers, innovation, and security all feature as priorities in banks' new
business development activities - with subplots around core banking
regeneration, supply chain finance, mobility, wealth management, and Green IT,
while more sophisticated risk management, predictive analytics, and compliance
monitoring are suddenly hot topics," said Peter Farley, managing director for
Financial Insights Europe.
A topic no one can hide from in 2008 is payments. Rachel Hunt, research manager
for European Banking, highlights the danger of SEPA fatigue and the increasing
trend towards local AOS. "Beyond regulation there is a lot of product
innovation surrounding payments in Europe as banks look to differentiate in a
commodity market. One of the hottest topics will be surrounding mobile
remittances."
Banking in Europe has never been more consumed by the subject of "innovation"
as financial institutions look for new ways to differentiate themselves from
the competition and engage better with customers.
Relating to differentiation, Trevor LaFlèche, senior analyst for European
Banking, discusses the possible business models for supply chain finance. "The
goal of the integrated supply chain is to impact working capital, reduce
transaction costs and increase visibility. While there are notable efforts
ongoing, no one solution currently covers the full spectrum of the
purchase-to-pay cycle."
Another innovation area for Europe is the mobile channel. "Mobility solutions
for the enterprise or for consumers are highly popular. However, consumer
demand for banking or payments via the mobile device is not quite there yet.
Still, there is much interest in offering mobile banking and payments services
for consumers. The challenge for banks is to find a viable business model that
offers the ROI and drives customer uptake," said Parveen Bansal, senior
analyst, European Banking.
However, in the short term, risk management will be a top priority. "Risk
management will be at the top of inquiries and we expect that over the next 12
to 18 months, there will be much emphasis on improving risk management
processes," said Simona Marcellari, research manager for European Banking
Practice.
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