Gartner is estimating the total technology spend in the Australian banking and securities sector will reach AU$18.5 billion in 2020, an increase of 5.2% from 2019.
Behind this growth are new investments in modern business intelligence (BI), augmented analytics, and robotic process automation (RPA) software, Gartner said.
According to Gartner, the adoption of modern BI within banking and securities organisations will outpace the adoption within other industries by 2023. It also believes the industry will take the lead in deploying RPA, with most large banks adopting it in some form by 2023.
See also: Gartner's top 10 strategic predictions for 2020 (TechRepublic)
Augmented analytics, Gartner continued, will increasingly leverage machine learning (ML) and drive new use cases in the market. Customer analytics was also flagged as a key focus for the banking and securities industry, which Gartner said includes visualisation tools that enable the bank to be relevant to individual and community needs.
Globally, the banking and securities industry spends the most on IT products and services, however in Australia, it is the second-largest-spending industry after communications, media, and services, which represents 19.2% of all enterprise IT spending.
Speaking at Gartner IT Symposium/Xpo on the Gold Coast on Monday, Gartner managing vice president Peter Delano said customers are changing their expectations for what they want from financial institutions, highlighting a need for the industry to rethink the customer value proposition, particularly in the face of technology and trends "hacking" the industry.
"Fintechs all over the place, in terms of creating brand new ways of doing business -- whether they're a fintech that is really focused on being another financial institution or a fintech that's looking to be a technology supplier to the industry -- have the benefit of a blank sheet of paper ... fintechs are hacking what it means to be successful in technology," Delano said.
"We've got the bots, the bots that are disintermediated our customers, perhaps, and the opportunity for artificial intelligence to hack the financial services industry in many ways, so we need to think about that and terms of the value proposition going forward."
According to Delano, the idea of "purpose" is going to permeate the industry more into the future, not just from an investment standpoint, but the companies themselves.
"Balancing our purpose and profit, and so actually looking at ways to impact environment, customers, employees, and so forth," he explained.
Pointing to Beyond Bank, an Adelaide-based customer-owned financial institution, Delano said there are a few examples where such a mentality is becoming noticeably important.
"Being able to invest profits into the community, thinking about flexible arrangements for their employees, all sorts of new ways of conducting business, as a bank, and shifting the focus -- so all of a sudden, as we rethink our industry, recognising that we're going beyond just the standard definition of a bank ... rethinking the investments that you're making and rethinking the business model," he said.
"Regulation is certainly forcing us to sort of rethink our industry.
"We are at a point where really the fabric of our industry is shifting. And these ideas of a triple bottom line -- people, profit, and planet -- is coming to fruition."
In a bid to build closer relationships with the local fintech scene to develop new innovative solutions, Eftpos on Friday announced the upcoming launch of a public API program in early 2020 that will see the payments network partner with accelerator Stone & Chalk.
Eftpos CIO Ben Tabell said a sandbox environment will be made available to partners by December, encouraging fintechs to "leverage the network and bring innovative solutions that enhance the payments experience for merchants and consumers".
Both Eftpos and Stone & Chalk are developing a roadmap to capitalise on the opportunities generated by the new partnership.
It follows the Australian government last week announcing it would look into the opportunities that fintech and regulatory technology (regtech) could present by standing up a Senate committee to, among other things, look at what other countries have already done in that space.
A Select Committee on Financial Technology and Regulatory Technology will undertake the inquiry by examining the size and scope of the opportunity for Australian consumers and business; the barriers to the uptake of new technologies in the financial sector; current practices and ways to strengthen them; as well as the effectiveness of current initiatives in promoting a "positive environment" for fintechs and regtechs.
Asha Barbaschow travelled to Gartner IT Symposium/Xpo as a guest of Gartner.
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