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DATAMONITOR VIEW |
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CATALYST |
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SUMMARY |
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2008 TRENDS TO WATCH: RETAIL BANKING TECHNOLOGY |
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Top business issues facing the retail banking market |
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Regulatory attention to fee levels, tightening lending criteria and a weakening economic outlook will drive lower operating income growth in 2008 |
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The sub-prime crisis has driven credit tightening throughout the banking sector, not just the US. |
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The main sources of retail banking revenue growth in 2006-7 are not present in 2008 |
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Further top-line pressure will come from regulatory attention to penalty fees, particularly in the UK market |
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Need to maintain internal funding will see focus on deposit growth and 'real' customer retention strategies |
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Competition in prime lending will drive improved pricing optimization, product bundling and innovation |
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Impact of 2008 industry outlook on IT will be a focus on efficiency or cost reduction over revenue growth |
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IT investment for Central Europe and Latin America banking markets is also dominated by cost reduction |
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Branch will remain top priority, with focus on servicing functionality and process consistency across channels |
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Branch investment will shift from infrastructure & sales effectives to servicing & origination |
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Online banking will see renewed focus, with security, enhancing the user experience and Web 2.0 core drivers |
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Banks are investing in second generation online platforms |
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The potential of Web 2.0, from both a threat and opportunity perspective, is driving R&D in this area |
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Compliance will continue to capture development spend, driven by security, operational risk management and the second wave of anti-money laundering investment |
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IT security remains a painpoint and driver for investment across all banking markets |
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West European banks will be focused on operational risk management (ORM) for 2008 |
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There will be a second wave of investment in AML in 2008 around detection and process automation |
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DATAMONITOR'S TAKE |
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The banking environment will drive IT investment conservatism in 2008 |
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Infrastructure will be an IT spend growth area in 2008 driven by data center modernization |
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Vendor marketing & sales messages need to switch back to hard benefits & execution credibility |
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APPENDIX |
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Definitions/ abbreviations |
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Methodology |
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Further reading |
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Ask the analyst |
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List of Figures |
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Figure 1: US banking loan provisions and net charge-off quarterly data 2004 -2007 |
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Figure 2: Weaker industry outlook will drive focus on cost reduction in WE and efficiency in NA |
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Figure 3: Cost reduction is top objective in Central European and Latin American regions |
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Figure 4: Branch remains investment growth area for 2008 despite shift in IT strategy onto cost reduction |
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Figure 5: IT security for all regions, AML in NA and ORM in W Europe as compliance focus areas |
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Figure 6: Security and infrastructure will be investment growth areas for 2008 |
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