Retail banks' priorities will change in 2014, with revenue growth taking precedence over cost-control and compliance management.
This was revealed by new research from Ovum, a global analyst firm.
According to Ovum, although cutting expenditure and complying with regulations will continue to be vital, retail banks must focus on revenue enhancement to provide a sustainable return for stockholders.
Over the next year, retail banks' business methodologies will also be impacted, said the research film in a statement. The prioritisation of revenue growth means there will be a focus on customer experience management and further investment in customer-facing business processes. For the former, digital channels in particular will be in the spotlight, but in an omnichannel context.
"Retail banking has been undergoing a structural shift since the financial crisis, the repercussions of which continue five years later," said Daniel Mayo, practice leader, financial services technology, Ovum. "However, the sector now appears to be moving into the next phase, driving a new set of priorities or strategies, with a focus on revenue growth, and making customer-centricity key."
This is supported by Ovum's ICT Enterprise Insights - the largest survey of senior IT executives ever conducted - which reveals that as the economic environment improves globally, banks are realising that investments must drive the enhancement of the customer experience.
To achieve this, retail banks will spend more on IT infrastructure. The digitisation of retail services will continue, creating ongoing security challenges and requiring investment to balance user experience with robust security.
However, the key technology shift will be the incorporation of analytics into business processes at an operational level, particularly in the areas of risk, marketing and operations, according to Ovum.
"Despite economic headwinds, IT spending in retail banking will see strong growth, with online and mobile channels being the top investment areas," said Mayo. "This spending will be driven by security enhancements, marketing and self-service capabilities, all of which are geared towards placing the customer at the centre of the retail banking industry."