Current IT spending within banks and financial institutions focuses on maximising staff productivity and keeping the lights on, but that's all about to give way to more innovative projects in the near future, according to IDC analysts.
"We're really seeing that there is a focus around PCs, laptops, regular day-to-day spending of keeping the lights on and keeping the staff working," Emilie Ditton, research manager, Vertical Markets at IDC Australia, told ZDNet Australia at the FST Summit in Queensland.
"I think it reflects a real focus at the moment on workplace productivity in financial services; there's a real focus on the devices that employees are using, how they interact with the platforms that are in place and how that then feeds through into the work tasks that they need to undertake," she said.
Innovative projects like cloud and BYO device roll-outs are still in the initial test stages for many financial institutions. Ditton, however, expects to see more financial institutions take up cloud shortly.
"There has been reasonable uptake of cloud so far in banking, but that has been in applications and platforms that are not entirely core to the business.
"Surveys we have undertaken with CIOs in banking suggest there is going to be considerable refocus around the cloud model and the expected deployments in the next couple of years are around the 40 per cent mark across the board," she said, adding that cloud was a way to manage capital.
Yet, stringent regulations around data are still strangling cloud deployments, Ditton added.
"I think banks are still really understanding what the implications of regulations are in terms of insuring that they deliver in that perspective. We're still working through that, but certainly there's an increased awareness of the potential of cloud in the industry."
Innovation spend is set to increase within banks, according to IDC's Michael Araneta, associate director of consulting and research for IDC Financial Insights. He believes that cash for innovation projects needn't come from the pocket of the chief information officer.
According to Aranata, banks and financial services companies should set up "centres of excellence" with a focus on innovation research funded by the office of the CEO.
"What we are seeing is that a lot of Australian institutions are creating centres of excellence that would facilitate the introduction of innovative payments or innovative products to their customers, as well as to their internal staff, and I think that is going to be a very important trend moving forward," Aranata told ZDNet Australia, adding that financial institutions will deliver more failed innovation initiatives than successful ones.
"I think what banks are taking is a portfolio approach to innovation, which means that they understand that out of 100 projects they take, two will probably be able to make it to market, and only one of them will succeed, and banks need to take that understanding that that is the nature of the game."
The key success of an innovation research centre will depend on who leads it, Aranata said.
"A lot of banks are creating centres of excellence [for innovation] that are headed up by really senior executives who have a lot of influence and political power in the organisation. I think that will be a critical step to achieving some success in the innovation programs," he said.
Watch the video for more spending insights from IDC experts.