Banking business is showing renewed strength globally. An analysis of revenue velocity in selected banking institutions in the first half of 2004 reveals a healthy growth rate of 17% over the same period in 2003.
Spurred on by an incipient market recovery and a continuing wave of mergers and acquisitions, business lines like bank cards and wealth management stand out for their double-digit revenue growth.
As banks focus on growing their business organically, they are targeting IT investments to strategic developments, such as advanced online transactions, innovative card products and multi-channel delivery. TowerGroup estimates that IT investments by banking institutions will globally amount to $159bn in 2004 and will grow at a rate of about 7% through 2006. As banks strive to sustain a healthy revenue growth, they will favour investment in technologies that are oriented to improve the customer experience and create new business value.
Guillermo Kopp is vice-president of financial services strategies and IT investments at TowerGroup
