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Understanding the Growth Opportunities in Russian and CIS Banking (Strategic Focus)

Datamonitor
October 5, 2009
35 Pages - SKU: DFMN2470009

Abstract Table of Contents Search inside this report Related Reports

Countries covered: Russia

Introduction

Up until the start of the current financial crisis, the retail banking market in the Commonwealth of Independent States (CIS) was undergoing a period of rapid transformation, as banks developed new products, services and channels. The sudden shock caused banks to change their priorities. The crisis is likely to significantly change both short- and potentially long-term IT priorities.

Scope

The Commonwealth of Independent States with focus on Russia
This report covers the banking sector that has evolved from the communist banking system.

Highlights

One of the side effects of the financial crisis in the CIS banking industry is the strong budgetary pressure to lower costs. However, this pressure is expected to be a short-term issue only (until early 2010). What is important is that the long-term growth objectives remain intact.

Companies that are interested in selling their solutions and services need to focus on the two primary criteria for selecting an IT vendor: price and the strength of the offering. It is important to highlight that the mentioned criteria take priority over local references and relationships.

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; The CIS banking sector represents one of the highest revenue growth potentials worldwide; The political and economic turmoil triggered a strong wave of reforms; Major strategic transformation is on CIOs' agendas; The transformation will rely heavily on technology; Foreign technology vendors should form delivery partnerships with local IT services firms; Balanced focus on solutions that address cost reductions and revenue growth is needed; Table of Contents; Table of figures; Market Opportunity; The CIS needs to be recognized as one broad market with Moscow as the financial capital; Economic growth in the CIS is expected to accelerate in 2011; The CIS banking sector has one of the highest revenue growth potentials worldwide; A crisis in the banking sector exposed many institutional weaknesses; A wave of consolidation is approaching; Reformation is needed; There is still plenty of room for growth; Business Strategy Overview and Technology Implications; The financial crisis forces banks to cope with new challenges; Inefficient utilization of distribution networks and customer bases; Questionable quality of service (inheritance of the bureaucratic communist system); Levels of productivity far below the Western standards; Underperforming risk management processes; Post-communist corporate cultures; Major strategic transformation on the agenda; Customer-centricity; Consolidation and centralization of functions; Risk management; The transformation will rely heavily on technology; The demand for technology is on the rise, driven by a major overhaul of core systems; Compliance and integration requires IT investments into back- and middle-office platforms; The payment business needs the technology to tackle fraud; Technology spending to grow at a healthy CAGR 8.3% (2008-2013); Growing need for IT talent to support the transformation; Technology Market Overview; Compliance with local accounting standards have driven the emergence of local banking platforms; Growing significance of specialized payment technology vendors; Card payment technology is expected to be in strong demand; The financial crisis has highlighted underperforming data management practices; Focus on sales optimization requires specialized technologies; Branch technology needed to drive productivity and servicing; Online banking is an opportunity for smaller or specialized banks; Contact centers will remain an important remote channel, particularly for mid-tier banks; ATM investment on hold until 2010; The product vendor landscape remains largely dominated by local vendors; IT services increasingly targeted by foreign vendors; Go to Market; Foreign vendors should form delivery partnerships with local firms; Foreign vendors should focus on acquisitions to gain presence; Local support is a core requirement; A balanced focus on cost reduction and revenue growth is needed; Banks primarily focus on the price and strength of offerings when selecting a vendor
APPENDIX: Definitions; Methodology; Further reading; Ask the analyst; Datamonitor consulting; Disclaimer
List of Figures: Figure 1: The Commonwealth of Independent States; Figure 2: GDP growth projections through 2014, constant prices through 2014; Figure 3: Russia is expected to be among the fastest growing banking markets in terms of revenues; Figure 4: The Russian and CIS markets promise high profits from banking in long-term; Figure 5: RUB-USD exchange rate development; Figure 6: Overdue loans/total loans in the Russian banking sector; Figure 7: The funding gap significantly increased in the Russian financial sector; Figure 8: Russian banking system pre-tax income; Figure 9: Profit forecast for 2009 in the Russian banking sector; Figure 10: Dynamics of household insurable deposits in Russia and Ukraine, 2000-2008; Figure 11: Retail Banking technology CAGR through 2013, geographical view; Figure 12: Retail banking technology spending through 2013, business function view; Figure 13: The centralized settlement structure of the Russian payment system; Figure 14: Credit card market growth projections; Figure 15: VTB Bank's more rigorous approach to risk management and risk monitoring; Figure 16: The branch network of Sberbank, the largest bank in the CIS; Figure 17: Selected product vendors with footprint in the CIS banking sector; Figure 18: Selected IT services companies active in the CIS banking sector

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Understanding the Growth Opportunities in Russian and CIS Banking (Strategic Focus)

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