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

Published by: Datamonitor

Published: May. 29, 2009 - 264 Pages

Table of Contents

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

Abstract

• 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.

• 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

About MarketResearch.com
MarketResearch.com is an online aggregator selling over 300,000 market research reports, company profiles and country profiles from over 700 research firms. Our reports will provide you with the critical business and competitive intelligence you need for strategic planning and marketing research. Coverage includes the US, UK, Europe, Asia and global markets.