Many of the banks in the country are planning to deploy technology related projects over the next one year, with an aim to reduce costs and ensure business growth, a study by global consultancy KPMG says.
According to the IT current status survey, which focused on identifying key technology trends in Indian banks, about 40 per cent of the respondents have a technology-related project lined up over the next one year to address cost reduction issues.
"Technology is now being considered for deriving strategic advantage for effective business growth and cost reduction projects within the bank," the report said.
Around 50 per cent of the banks surveyed consider e-commerce, mobile banking and financial inclusion initiatives as key areas for strategic growth, the survey revealed.
Meanwhile, capital and operational expenditure in IT by majority of the banks currently hovers around one to three per cent of their annual revenues, it added.
"Appropriate investment in technology is today considered key. This has various ramifications — ensuring profitability, enhancing value to the end customer and addressing overall societal development," KPMG India (IT Advisory Head) Kumar Parakala said.
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"Over the past year, various banking institutions have been introspecting on efficacy of their system implementation through programmes such as constitution of reviews of core banking systems, conducting IT security efficacy studies and evaluation of value-added systems," Kumar added.
Besides, close to 60 per cent of the banks surveyed feel the top technology challenges are in keeping up with changes to regulatory guidelines and implementing Basel II.
It was also noticed that important channels of customer outreach such as Automatic Teller Machine (ATM) and card service management have been outsourced, showcasing increasing levels of comfort with respect to technology outsourcing, the survey said.
Application consolidation and process/ workflow automation along with virtualization were the top cost reduction initiatives, the survey added.
The information in this survey is based on data received from the top management and technology leaders of 15 leading banks in India.
The survey probed key trends in technology that enables banking processes and feedback received on factors such as cost, proposed technology initiatives and technology strategy, have also been collated.