UK banks no longer consider reducing costs as their top priority as they focus IT developments on raising customer service levels.
Research from Fujitsu of 176 senior IT leaders at UK banks revealed that 28% put increasing/improving customer experience as a top three IT priority, while 27% put reducing costs in the top three.
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Although these figures are similar, when compared with the last study of this type from Fujitsu, the focus on service levels rather than cost is clear. In the 2012 study, 53% said reducing costs was a top three priority, while 22% said increasing/improving customer experience was in that category.
“While cost-cutting has fallen away, it certainly hasn’t vanished,” the research report said. “It might not be top of the agenda any longer, but trimming the fat is still high on the priority list.”
Banks are increasingly focused on improving customer service as regulators attempt to stimulate competition. For example, a regulation introduced by the Banking Commission aims to simplify and speed up the process of changing bank account providers for consumers, small businesses and charities. The seven-day switching service, as it is known, will slash the time taken by the current switching process, which is up to 30 days.
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“Living in the era of the seven-day switching guarantee, personal finance customers are able to jump between banks with greater ease than they ever have before,” the report said.
As well as start-up banks and financial services providers, non-traditional banks such as Google and Facebook are increasingly offering financial services. Google and Facebook are perfectly positioned to provide information enrichment services to help consumers bank.
The Fujitsu report also revealed optimism around IT budgets over the next three years. Some 31% of IT leaders said they will have a bigger budget in 2014, 30% said so for 2015 and 37% said so for 2016. A total of 19% said they will have less IT budget in 2014, 16% said so for 2015 and 11% said so for 2016.
Banks are increasingly investing in technology to allow customers to use services via mobile devices, but day-to-day operations still account for most of the IT budget, with 47% spent on running the company, compared with 28% on changing the company.
When it comes to IT staff, 75% are in-house, with the rest contractors. A total of 89% of IT leaders are confident they can recruit the right IT staff to take them forward over the next three years.