Focus: IT in banking - information technology

Historically one of the bedrocks of IS investment, the banking community has been beset with a numbing series of changes over the past couple of years. Major players in the economic expansion of the 1980s, banks are among the most visible victims of the lowered expectations of the 1990s. The recession has increased the number of bad loans and decreased the worth of real estate security. Banks have reacted by consolidation and belt tightening, both of which have had an effect on IS investment.

The economic climate is only one factor, however, in the high number of instances in which banking scores very high or very low on various questions. The long-standing conservatism of the banking sector shows in its attitudes towards some new trends, including Unix, while other new developments will clearly be embraced as soon as the budget pressure eases.

*The banking sector in the survey base saw

budgets drop 10% on average in 1991, and

expects only average growth in 1992. With

average site budgets in excess of $4 million,

the highest in the survey group, the downturn

for banking has affected the entire IT

market.

* Banking had the highest negative rating in

its attitude towards IS spending; almost half

checked choices indicating stable spending

with no major growth in any area, or a contraction

of spending.

* Controlling costs is a critical imperative for

nearly two-thirds of the banking community,

by far the highest ratio for any of the

sectors surveyed.

* Outsourcing has a particular appeal to banking

IS shops, with 30% actively pursuing or

considering it as an option.

* Migration from older systems to more modern

hardware and/or software platforms is a

lower priority for banking than for any other

group in the survey base.

* IS managers in banking view themselves as

incrementalists, making regular if often small

improvements to existing systems.

* Banking nevertheless scores relatively high

in the degree of penetration anticipated in

1992 for 11 new types of products and services.

Among new technologies, banking

shows relatively strong interest in image processing

and multimedia.

* Banking had the lowest proportion in the

survey base expecting to downsize existing

applications, but even so over 10% expect to

move major applications off central computers

onto smaller, distributed systems.

* Banking had a relatively low proportion of

respondents (21%) pursuing or considering a

Unix-oriented strategy.

* In 1991 MS-Windows had been installed on

26% of PCs in the banking sector, a proportion

very close to the survey average; however,

by yearend 1992 this ratio is expected to

increase to a survey-leading 60%.

* A much higher proportion (62%) of the banking

base than average states that it still has

many terminals to replace with PCs and

workstations.

* The replacements will presumably be largely

PCs, since banking had the lowest percentage

(18%) agreeing that Unix workstations

are becoming a viable alternative to traditional

personal computers.

* In 1991 over half the PCs purchased in the

banking sector came direct from the manufacturer,

compared to only a quarter in the

survey base as a whole.

* A survey-low 29% of PCs in banking were

connected to a host computer, compared to

an average of two-thirds.

* A low 27% of PCs in banking were on a local

area network at yearend 1991, compared to

44% overall. Strong LAN penetration in 1992

should increase the ratio to 47%, still well

below the average of 60%.

* Banking is a relatively high consumer of

packaged applications, with 50% of software

spending going for packages (compared to

30% overall) and the rest for internally developed

applications and outside contractors.

* Overwhelmingly the major activity of software

staff at banking sites is systems or network

maintenance, which accounted for 60%

of staff time compared to an average of 33%.

Only 16% of staff time went to developing

new applications.

COPYRIGHT 1992 International Data Corporation
COPYRIGHT 2004 Gale Group