A significant number of banks in the Asia Pacific (APAC) region are set to increase their security and data transformation investments, according to the latest survey by the International Data Corp. (IDC).
The survey, which polled 316 banking decision-makers from Australia, China, Hong Kong, India, Indonesia, Malaysia, New Zealand, Singapore, and Thailand, saw that 83.2% of banks will increase their technology budgets in 2023. Some 14.8% will increase their IT budgets by 20% or more.
“The banking industry is always situated at the forefront of constant innovation, amid challenges posed by global economic uncertainties, emerging competitors, and ever-changing customer demand,” said Adam Kamarul, market analyst at IDC Financial Insights. “The priorities set by the banks in 2023 serve both as a guidance on where banking is headed next and a signal for the types of technology innovations that will take place.”
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IDC found that APAC banks are also looking at strengthening their data & analytics (68.4%) and artificial intelligence(AI)/machine learning solutions (64.6%) capabilities.
AI-enhanced tools
“These priorities reflect an urgency for banks to address the rapidly escalating landscape now driven by institutionalized threat actors with AI-enhanced tools to combat security risks,” IDC said.
IDC pointed out that banks are recognizing the value of banking data as a significant commodity and driver of new revenue, where establishing new analytic frameworks and methodologies can offer banks immense advantages over their competitors.
Some 47.8% of respondents said that the decision to increase IT investments is to ensure that should there be downtime, it won’t be significant to affect their clients. About 43.7% of those surveyed also said that they want to manage operational risks of migrating their IT infrastructure as a reason for the budget increase.
“In the next 24 months, APeJ banks are prioritizing the enablement of third-party integration (50.0%) and innovating corporate banking products via API (48.1%),” IDC said. “In the next five years, 70.6% of banks believe that their ESG strategies will positively impact their profits.”