Asia Pacific set to lead investment in retail banking technology

According to a recent report by Ovum titled “Retail Banking Technology Spending Model Through 2016: Business Function Segmentation” emerging economies in the Asia Pacific region will grow the fastest in terms of their investment levels in retail banking technology. The report predicts that the Asia Pacific region is set to grow investment at a rate of 8.3% in 2012, hitting $10.2bn by the end of the year. Western Europe will have the lowest growth of all the regions at 1.9% despite being the second biggest market in terms of overall spend. The report also predicts that online banking, mobile banking, customer analytics and multi-channel integration will be hot areas of growth and focus globally.

The timing of the Ovum report coincides with a similar report released a fortnight ago in the UK by Price Waterhouse Coopers. In “The New Digital Tipping Point” report by the global consultancy firm it calls on UK retail banks to capitalise more on the potential of digital banking. The report predicts for example that by 2015 the majority of retail banking customers in the UK will use digital banking more than they use physical high street branches. That prediction is certainly very realistic and achievable given the planned introduction of the faster 4G mobile spectrum in the UK and the increasing roll out of faster fibre optic broadband to domestic properties in the UK. These key technological developments will serve to drive a deeper penetration of mobile and online transactions by consumers.

I was talking to a retail banking analyst friend today about the reports and he mentioned that globally banks have by and large been slow on Social Media compared to other sectors. He went on to express an interesting viewpoint which was he felt retail banks could not truly maximise the effectiveness and benefits of digital and mobile banking technology without first advancing more on the Social Media front. It is certainly a somewhat interesting view that he has. Of course, the view in itself that banks have been slow on the uptake of Social Media is not new as that view has been around for a while now.

Several corporate communications professionals for example have suggested over the last few years that because banks and banking are generally perceived as “boring” topics by the public, there is not the appetite by the consumer to engage with banks effectively on Social Media. In the increasingly crowded and competitive Social Media space banks have to compete with many more “exciting” brands, Facebook games and applications for both the attention of the consumer and also meaningful interaction with them. There are also security and regulatory factors for retail banks to consider regarding Social Media engagement in the midst of this. Resourcing may be another issue too as banks may fear that if they open the door to Social Media they will be flooded with consumer complaints, which they may not have the staffing resources to deal with. It is no secret that consumers expect an almost instant response to complaints posted on Social Media channels of organisations.

As a corporate communications professional I believe there is no reason why the banking industry cannot use Social Media and digital technology to engage with consumers. Yes, there are undoubtedly challenges and limitations to integrating Social Media into retail banking, but it is certainly not “mission impossible” either. Furthermore, and crucially, reasons for not doing Social Media in banking or developing it further can easily become a barrier to innovation and creativity within the banking industry.

So how does the issue of Social Media engagement by banks directly link in with the news that the Asia Pacific region is predicted to lead increased investment in retail banking technology globally? Well, to answer that question I wanted to finish with this final interesting thought proposition for readers to reflect upon.

The news of increased investment during 2012 in retail banking technology has a deeper and perhaps not so obvious significance. This is because I believe the increased investment will almost be a “hidden” catalyst in itself to driving forward Social Media engagement in the retail banking sector. As consumers switch more to online and mobile banking, and visit their high street bank less, banks will increasingly look to engage more deeply and meaningfully with consumers digitally and online. That can only be a natural consequence of more consumers switching to online and digital banking. The more investment there is in digital banking technology, the greater the numbers of consumers who will be attracted to it and convert. So, increased investment in retail banking technology, will in itself I believe be a driver for a deeper exploration of ways to integrate Social media within retail banking technology. Indeed, the future vision of digital banking is ultimately for retail banks to be richly engaged with their consumers on the social web while simultaneously strengthening customer relationships through that. Arguably, the greater the investment in digital banking technology, the greater the journey along the learning curve for banks in terms of Social Media integration with digital banking technology. With the Asia Pacific region set to lead investment levels globally in retail banking technology during 2012, it may also be well placed to lead the way on Social Media integration with digital banking technology.

Johnny McGinley is a talented UK based Corporate Public Relations Advisor, Online Journalist, Author and Social Media Awards Judge. He is a Chartered Institute of Public Relations Accredited practitioner with over a decade of experience in PR and specialises in Digital Media. Please visit www.johnnymcginley.co.uk for further details. 

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Tags: Johnny McGinley, Asia Pacific, retail banking technology