EUR 120.00 For Business Accounts Only

MOSL: TECHNOLOGY-Could global banks’ IT spends surprise positively?

What does our reading of the AR19s of global banks suggest?
** More than ~25% of all new products are provided through digital channels; ~33% of sales and up to ~70% of all banking transactions now happen digitally.

** Banks are making significant investments in areas such as User Interface (UI) and Artificial Intelligence (AI), which allow them to offer great personalization. Data, analytics and automation are other areas attracting investments.

** Across banks, such as Deutsche Bank (DB), while G&A spends are under constant pressure, IT spends are either resilient or showing a robust increase.

** Companies are creating a new Chief Digital Office (e.g., U.S. Bancorp) for overseeing digital transformation and enhancing digital capabilities.

** Banking firms such as Citibank and BofA have been investing in digital initiatives to unlock efficiency improvements. Resultant cost savings are, in turn, being used to finance incremental investments and growth-driven expenses.

** Enterprises such as JPMorgan are adopting more agile ways of working, including product- and platform-based architectures.

How are global BFSI firms fighting the COVID-19 crisis?
** Annual reports for 2019 (AR19s) and 1QCY20 earnings call commentaries suggest first-order business disruption due to COVID-19 is limited to a few aspects, such as BPO capacities.

** Up to ~90% of bank employees are currently working from home.

** Most of the firms acknowledged the role of technology/infrastructure investments in enabling remote work at such a large scale and short notice.