Financial IT suppliers handed a blueprint for 2016

It may still be the most rate-rich industry for IT contractors, but financial services will share one big trait with the ailing public sector when it comes to IT in 2016 – the need to cut costs.

In fact, incumbent financial services firms (as opposed to newcomers) will have to fund much of their innovation next year by cutting running costs, predicts TechMarketView (TMV).

But the IT analysis house says this need for “selective and strategic” IT spending won’t just be in the financial sector, where “regulation will continue to consume a lot of IT resources.”

“All [outfits in the public sector], whether their budgets were protected or not [in AS 2015], must make further efficiency savings, while also implementing new government policies.”

Due to both the government and financial sectors needing to trim budgets, TMV found another similarity. In particular, each sector seems set to consider how to use ‘digitisation’ and ‘collaboration’ to drive the efficiency savings.

In the public sector, this consideration must go hand-in-hand with looking at how an array of technologies and data (not just inside government) could release “huge value” if used effectively.

In financial services (FS), the consideration will see incumbents migrate more to The Cloud and set up IaaS and PaaS environments, in the hunt for “more agility and better cost ratios.”

TMV said of its forecasts: “Vital skills [for FS IT suppliers] will be the ability to manage hybrid IT, leverage key personnel and prioritise initiatives which generate future value.”

These IT suppliers should also focus on business outcomes; provide more insight and data management, and use scale-advantaged tech and intelligent automation, says TMV’s Peter Roe.

At the same time, the financial IT suppliers will face “pressure to ‘design for digital,’ he said, pointing to the smartphone as a tool to improve customer experience.

To accelerate such IT-enabled change, Roe foresees more FS firms moving to standardised processes, new delivery models and API-dependent models to access more capable apps. 

But he warns that “many [IT] initiatives will be competing for budget,” as FS companies will be seeking to commit to those which offer them a “competitive edge.”

“[Financial] companies will push digitalisation to reduce costs and look to enterprise-wide Big Data and increasingly IoT”, Roe predicted “[Their] suppliers [will next year] need to focus on the end-to-end process and on the customer; determine their priorities and get their timing right if they are to realise their potential.”