Banks spent $12.68billion on ICT in 2019
About $12.68billion was estimated to have been spent by banks in the Middle East and Africa in 2019, on information and communications technology (ICT).
This investment was said to have gone into both software and hardware acquisitions.
An insight from the International Data Corporation (IDC), which disclosed this, however, forecast that this figure will reach $13.23billion this year and continue rising at a compound yearly growth rate of 4.7 per cent over the coming years to reach $15.24billion in 2023.
IDC’s Senior Consultant for the Middle East and Africa, Nagia El Emary, said the banking and finance industry is becoming increasingly reliant on emerging digital technologies to attract and retain customers.
“The sheer magnitude of financial technology (fintech) products and services on the market today is staggering. And financial institutions are increasingly embracing 3rd Platform technologies and innovation accelerators such as cloud, mobility, and artificial intelligence (AI), to increase their market penetration rates, enhance customer satisfaction through the delivery of personalised services, and streamline operations to cut costs and maximise efficiencies.
“As such, these technologies are becoming an inextricable part of the sector as a whole, and this is only the beginning.”
According to the Data Corporation, the increasing reliance on cloud across the industry has given rise to cloud marketplaces.
It stressed that similar to an app store for smartphones, these cloud marketplaces provide banks with access to third-party IT systems and fintech products and services. And like any other marketplace, cloud marketplaces have the power to negotiate better terms with fintech providers than banks alone.
Consequently, IDC expects that by 2024, around 80 per cent of banks globally will be purchasing and integrating fintech solutions from cloud marketplaces.
Furthermore, the use of artificial intelligence is also becoming pervasive across the BFSI industry.
Indeed, the global technology research, consulting, and events firm, expects that by the end of this year, 85 per cent of banks will have implemented AI applications to enable intelligent decisions and automated processes for corporate know-your-customer procedures, drastically reducing the time it takes to approve enrolment for new corporate accounts.
The Corporation also forecasts that by 2023, 40 per cent of insurers will be automating claims processes with AI technologies and conversational interfaces to improve the speed of response, efficiency, and personalization.
All these trends and more will be discussed during a dedicated banking and finance session that will take place at the upcoming IDC Middle East CIO Summit 2020.