Asian banks first to return to normal growth rates among global banks: IDC Financial Insights
28 Feb 2013
Singapore and Hong Kong – 28 February, 2013 – Asian IT leaders can now think about "new" things in banking as regional banks become the first to go back to normal growth rates among global financial institutions.
“Asia/Pacific banks are returning to normal rates of growth in terms of revenues and profits,” says Michael Araneta, director for IDC Financial Insights Asia/Pacific.
Araneta expects that the industry in the region will see rare occasions of extraordinary gains and declines in revenues in 2013. Profit growth for the region's largest banks converged to 20% in 2012 over 2011, and will converge to approximately 15% in 2013 -- similar to rates of growth in pre-crisis years. Meanwhile, revenue and profit growth in the world’s leading banks has not normalized, and the swings in profitability continue to be wild among the largest non-Asian banks in the world.
"While the previous years saw banks report super-growth especially in terms of profits, we will see less of that trend in 2012. However, going back to normal is not a bad thing, especially if you are moving on from a crisis."
He notes that the region's banks are also going back to pre-crisis growth levels for IT spending.
Araneta expects IT spending in Asian banks to grow 8.8% in 2013 over 2012. This figure is an improvement from the approximately 7% growth the industry saw in the previous year, and the 6.5% the year before that.
“I believe that this speaks of banks’ improving confidence in the financial conditions in the region and in the rest of the world. This also points to the theme of ‘going back to normal’ because this 8.8% brings us back to pre-crisis rates of growth.”
A major area of spending will be on core banking modernizations. Araneta explains that as a group, Asia/Pacific banks are assumed to compare favorably versus their peers in the United States and Europe with respect to the age of core banking systems currently in use.
In the "old world," truly modern core systems are rare. In Asia/Pacific, meanwhile, there have been many references of banks leapfrogging technologies and investing in new generation core systems, not to mention how several newly emerged institutions have built up altogether sophisticated core banking platforms.
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About the Asian Financial Services (AFS) Congress 2013
Organized by IDC Financial Insights, the AFS Congress 2013 is Asia/Pacific's foremost gathering of financial services practitioners. Themed “Building on Big Ideas", the Congress aims to decode for financial institutes the large forces of change that surround them, and decide which are worth taking advantage of, and which can take the backseat — for now. At this Congress, IDC Financial Insights will share crucial findings from its international team of analysts, highlighting the business and technology trends that will impact and change banking.
About IDC Financial Insights
IDC Financial Insights assists financial service businesses and IT leaders, as well as the suppliers who serve them, in making more effective technology decisions by providing accurate, timely, and insightful fact-based research and consulting services. Staffed by senior analysts with decades of industry experience, our global research analyzes and advises on business and technology issues facing the banking, insurance, and securities and investments industries. International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology market. IDC is a subsidiary of IDG, the world’s leading technology, media, research, and events company. For more information, please visit www.idc-fi.com, email firstname.lastname@example.org, or call 508-620-5533. Visit the IDC Financial Insights Community at http://idc-insights-community.com/financial.
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