European Banks’ IT Spending On Knowledge Management Solutions Will Increase At A 1999-2004 CAGR Of 38.5%, IDC Says

LONDON — NOVEMBER 16, 2000 — Banking is an information-centered activity and the capability to make information and knowledge available at the right time, in the right place, and without delay is a key requirement for banks. However, the adoption of knowledge management (KM) among European banks is in its infancy.

 

According to an IDC survey, only 20% of Western European banks are currently using a KM application. IDC expects this situation to change in the near future, and KM will become a priority for the banking sector.

Due to an increasingly competitive environment, European banks are ramping up efforts to implement knowledge-based systems that could "link" or "connect" people to people and people to knowledge.

A growing level of IT spending on KM solutions will mirror the increasing propensity for adopting knowledge-oriented approaches in banking. IDC predicts IT spending on knowledge management systems in the European banking sector will amount to $155.4 million this year and will record a 38.5% compound annual growth rate (CAGR) over the 1999-2004 period. To achieve this result, European banks have to overcome cultural and organizational resistances.

"Implementing a KM system is not solely a technology issue," said Raffaella Molignani, research analyst for IDC's European Banking program. "A key element of the offering for KM solutions currently available in Europe is the capability to support organizational and cultural changes."

Key Findings:

IT spending on knowledge management systems in the European banking sector will amount to $155.4 million in 2000 and will reach $511.4 million in 2004.

IT spending on knowledge management will be concentrated in just a handful of European countries. France, Germany, Italy, the Netherlands, Sweden, and the United Kingdom will contribute four-fifths of the total IT spending in the Western European banking sector. In particular, the fastest-growing countries are expected to be France, the Netherlands, and Sweden. The United Kingdom and Germany will record the highest levels of spending.

Several IT vendors in Europe are addressing this demand for KM solutions in banking. Different approaches are emerging: some vendors identify a dedicated line of offering for KM, while others develop dedicated capabilities in this area.

The KM offerings (CSC, EDS, Getronics, Lotus/IBM, NCR, and Unisys) are on average well aligned with the requirements of banks and namely with regard to functional coverage, vendor independence, and breadth of the offering.

Implementation Strategies for Knowledge Management in Banking, Part 1 (IDC #MB01G) analyzes the demand for KM solutions in banking. In addition, the study includes data on the status of KM implementation in European banks. Estimates of IT spending on KM solutions in the European financial sector from 1999-2004 are also provided. Implementation Strategies for Knowledge Management in Banking, Part 2: Analysis of Competition (IDC #MB01Ga) profiles leading providers of KM solutions for the banking sector (CSC, EDS, Lotus/IBM, Getronics, NCR, and Unisys) and discusses competitive positioning.

The European IT Banking Forum 2000

eBanking 2.0: European Markets, Global Products, and the Partnership Perspective IDC's fifth annual European IT Banking Forum takes place November 27 and 28, 2000 in Milan. A full agenda, including speaker details, topic areas, and booking information, for this event as well as other European IDC events can be found at http://emea.idc.com/forum/. For complimentary press registration, please contact Mathew Heath at +44 20 8987 7107 or mheath@idc.com.

About IDC

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.