ICT scenario and market trends for the banking sector 2018

The ABI Lab 2018 Report highlights three essential priorities driving the ICT transformation agenda in Italian banks: advancing digital transformation, fostering openness to new ecosystems (notably through Fintech partnerships and regulatory-driven Open Banking), and reinforcing governance, soundness, and security. These strategic priorities underpin major investments and organisational shifts, aiming to respond to technological disruption, increased customer expectations, and evolving regulatory requirements—ultimately positioning banks for agility, resilience, and competitive edge in the dynamic financial sector.

Key Results

• ICT Budget Growth: For 2018, 86% of surveyed banks reported stable or increased ICT budgets; 60% experienced an increase vs. 2017, with 31% of large banks planning growth over 5%.
• Investment Focus Areas (Top 5):
  • Data Governance (73%), driven by GDPR and data-centric transformation.
  • Internet Banking Service Improvement (63%).
  • Core banking system modernization and infrastructure upgrades (57%).
  • Mobile Banking initiatives (57%).
  • Cyber risk management and mitigation (57%).
• Research & Innovation Priorities:
  • Largest banks focus on Artificial Intelligence, Blockchain/DLT, and Robotic Process Automation (all >60%).
  • Smaller banks prioritize Payment Security, Digitalization, and Internet Banking upgrades.
• Strategic Outlook to 2020: Payment security (63%) and development of digital channels (Mobile and Remote Banking) are ranked most critical for strategic relevance in the near future.

Bank strategies are becoming more nuanced by size: larger banks lead disruptive projects in AI, blockchain, and open API adoption, while smaller banks focus resources on incremental innovation, payment security, and dematerialization. The shift from incremental to disruptive innovation is more apparent in the research phases than investment, as concrete deployments still center on evolutionary impact, especially improving internal processes and customer-facing channels.

The report documents a broad adoption of enabling technologies underpinning transformation: blockchain initiatives concentrate on intra- and interbank transfers (63%), API/Open Banking primarily target mobile and payment services (over 80% in large banks), and Big Data and Analytics are most implemented for customer service and marketing. Robotic Process Automation is gaining traction in lending, support processes, and payment services, indicating a maturing automation agenda across operational areas.

A significant theme is the deepening collaboration between banks and Fintechs: 63% of banks engage in partnerships with Fintech companies, with research and co-development as preferred approaches. The technological focus is firmly on Big Data & Analytics, Blockchain, AI, and Cloud Computing, indicating a convergence of next-gen capabilities to drive both efficiency and new product development. Regulatory compliance and robust cyber resilience remain central, with initiatives such as GDPR implementation, cyber threat monitoring, and the establishment of the Italian Financial CERT (CERTFin) underscoring the sector's commitment to secure innovation.

In the final analysis, the ABI Lab 2018 Report underscores Italian banks' determination to blend technology, security, and strategic openness for sustainable growth. Success hinges on maintaining balanced investment between “Run” and “Change,” cultivating advanced governance models, accelerating digital and mobile innovation, and forging productive ties with external ecosystems. Managers should prioritize resource alignment to leading-edge technologies and process redesign, ensuring organizational agility and compliance in the face of continued disruption.

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