Since 2003, improved corporate performance and personal consumption have spurred a market recovery in Japan.
In the banking sector, improved earnings have fueled the return to a more assertive approach towards business strategy, according to a new Celent report, IT Spending Trends in the Japanese Banking Industry.
As banks have reached the home stretch in repaying borrowed public funds, they have begun to actively seek lending opportunities for companies and individuals while working on strategic initiatives to attract mass affluent customers.
City banks are aggressively taking action in the wholesale business arena with the hope of strengthening their global strategies. Both first tier and second tier regional banks are striving to implement community-based strategies and retain customers while working to expand their branch networks and services to drive growth in their customer bases.
New players such as Internet-based banks and entrants from other sectors are appearing as megabanks, with vast customer bases and branch networks continuing to expand their influence. Entrants from other industries are also placing increased pressure on small community-based regional banks and credit unions.
“The addition of Japan Post Bank to the banking community will drive increased IT spending across the industry. Megabanks’ ongoing systems consolidation projects will also contribute to increased spending,” says Yumiko Manchu, an analyst with Celent’s Asia Research Group and author of the report.
Once systems consolidation has been achieved by the end of fiscal year 2011, operating costs are expected to decrease, and the growth rate of IT spending will slow but not stop. When companies have completed systems rationalization, they will intensify strategic spending initiatives, ensuring that IT spending in the banking industry will experience continued growth.
This report provides an outlook for the future of IT investment in the banking industry while offering a survey of the business landscape for domestic banking. It analyses the sectors in which banks will be focusing their IT spending in the future.