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Opportunities and Threats in the Central and Eastern European Banking (Strategic Focus)

Datamonitor
May 29, 2009
264 Pages - SKU: DFMN2280577

Abstract Table of Contents Search inside this report Related Reports

Countries covered: Europe

Introduction

The retail banking market in Central and Eastern Europe had been undergoing a rapid transformation, as banks developed new products, services and channels, up to the financial crisis, when the sudden change shifted their priorities. This will modify both short-term and potentially long-term IT strategies and IT investment priorities.

Scope

Central and Eastern Europe is defined as the former socialist countries, or socialist republics in Europe that have decided not to join the CIS.
This report covers the banking sector that has evolved from the socialist banking system.

Highlights

The recent macroeconomic environment has resulted in increased pressures on driving downward operating income growth, which is leading to the adjustment of the cost base to maintain profitability, and there are many banks which are suffering extensively during the crisis.

More than half (57%) of the respondents from CEE pointed out that the branch was the most important business area for driving the increase in IT spending in the last quarter of 2008.

Reasons to Purchase

This research will enable to you to understand changes in IT budgets and how they could impact your customers
This research will enable you to understand how evolving business pains will result in demand for specific solutions

Overview: Catalyst; Summary; Key Messages; Despite the downturn, structural and economic fundamentals remain strong for long-term growth; The financial crisis has hit the region stronger that many had foreseen; Decreasing profitability is driving a shift to cost-cutting strategies; The financial crisis has polarized 2009 IT growth plans; Focus on branch development, driven by need for deposits, is a top IT priority; IT vendors' landscape remains largely unconsolidated across the CEE banking market; Vendors need to investigate relationship between headquarters and centers of excellence; Table of Contents; Table of figures; Market Opportunity; CEE and CIS markets need to be distinguished; Western European banks have increased their operations significantly in CEE; Foreign banks' entry has significantly influenced the economic environment in CEE; Positive effects of foreign banks' entry for the local market:; Negative effects of foreign banks' entry for the local market:; CEE countries are on the road to maturity of their banking sectors; Macroeconomic factors in the CEE region shape strong long-term growth potential; Low inflation rates a necessity to join the eurozone; The credit market is still far from saturation; Euro adoption still in progress; The financial crisis has hit the CEE harder than many had foreseen; The financial crisis reduced competitiveness for new lending; The financial crisis has created a vicious cycle between the consumer and commercial banking sectors; The behavior of foreign-owned banks will influence the development of the crisis; Stabilization is a necessity to join the eurozone; Technology Opportunities and Threats; Focus on revenue growth continues despite the risk of cost cutting requirements; The financial crisis has polarized 2009 IT growth plans; Focus on branch development, driven by need for deposits, is a top IT priority; The centralization of banking operations is changing the technology landscape; CEE technology spending will be shifting progressively toward Western Europe; Core systems, payment processing and branch technology expenditure will grow at a healthy rate; Technology Market Overview; Centralization efforts drive reduction and re-engineering of existing platforms; Payments technology expenditure driven by investments in anti-fraud and the mobile channel; Investments into middle office are driven by anti-fraud technology; Sales focus increasingly drives further investments into CRM systems; Vendors bet on analytic CRM technology; Channels are in the center of interest for banks; Branch expansion dominates channel investments; Online technology consolidation underway; The ATM world is a three horse race but outsourcers are catching up; Contact centers are still immune to centralization efforts; The product vendor landscape remains unconsolidated; Local software vendors will continue to be niche players; IT services landscape largely diversified; Both local and western vendors have managed to significantly penetrate the market; IT services companies are looking for the 'hot spots' of banks; Go to Market; Recommendations for technology vendors; Vendors need to investigate the relationship between headquarters and centers of excellence while analyzing the decision making process; Vendors need to reach a critical mass before the crisis passes by in CEE to make SaaS up-take successful; Local language skills are not critical but local domain expertise is; Now is the time to buy as economic turbulence creates bargains; Local vendors should analyze their exporting options; Recommendations for banks; Western banks should evaluate local vendors' offerings that pose a low risk to operations; Banks should watch out for under-investing during the economic recovery
APPENDIX: Definitions; Methodology; Further reading; Ask the analyst; Datamonitor consulting; Disclaimer
List of Figures: Figure 1: Central and Eastern Europe vs. rest of Europe; Figure 2: International banks have widely spread across Central and Eastern Europe; Figure 3: Banking development in transformation economies; Figure 4: Gross domestic product based on purchasing-power-parity per capita GDP in selected countries; Figure 5: Personal credit saturation level in CEE; Figure 6: CEE Banks' objectives to IT investment strategy in 2009; Figure 7: CEE banks' major strategic goals for 2009; Figure 8: Direction of IT budgets changes has diverged; Figure 9: Crisis effect on IT budgets in the banking sector; Figure 10: Expansion plans drive branch technology investments; Figure 11: Raiffeisen's branch expansion plans by 2010; Figure 12: Centralization and expansion efforts drive investments in infrastructure; Figure 13: Retail banking technology spending by country through 2013 ($m); Figure 14: Retail banking technology spending by business function through 2013 ($m); Figure 15: Centralization efforts drive reduction and re-engineering of existing platforms; Figure 16: Anti-fraud and mobile payments drive technology spending; Figure 17: Expansion efforts drive investments into channel technology; Figure 18: Selected product vendors with footprint in the CEE banking sector; Figure 19: Selected IT services companies active in the CEE banking sector

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Opportunities and Threats in the Central and Eastern European Banking (Strategic Focus)

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