TowerGroup estimates that total IT spending in the global financial services industry will rise 4% from nearly $334bn in 2003 to just over $347bn in 2004. Continuing this growth pattern, total IT spending will increase to $379.2bn by 2006, at a compound annual rate of 4.5% from 2004. Banking customers, both corporate and individual, demand superior service and are taking note of their institutions’ performance gaps vis-à-vis other service industries. Innovation will shift dramatically from the traditional, vertically focused dimension of banking products to a horizontal integration of new service breakthroughs by virtue of a federation of alliances and partnerships. Bank business strategy will shift from short-term cost cutting mandates to long-term value and revenue growth.
Dear EditorI have been following the debate about Basel II in The Banker with interest. To use an insurance analogy, moving from a flat-rate method of assessing motor premiums to one in which premiums depend on the driver’s accident history inevitably provokes opposition from learner drivers and those with poor accident records. But safe drivers are not treated fairly by a flat rate approach. The Basel Committee has been exceptionally transparent in the development of its proposals and this has manifested itself in the controversy reflected in your columns.