Tuesday, August 16 2011 17:57

Armenian banks are ready to spend about 32% of their profit to improve IT infrastructures and technical upgrading

Arminfo. About 46% of Armenian commercial banks are going to invest $200-500 thsd to improve IT of the banking sector, 20%- $100-200 thsd and another 20% - more than $500 thsd, marketologists of the marketing company M-Info reported, according to the poll "Information Technologies in the Banking Sector of Armenia" held among the leaders of the IT departments of the banks. If we compare these indices with those of executive directors of these banks, marketologists of M-Info say that assessment of the investment volumes is rather realistic. Such prediction is also proved by the viewpoint of financial directors of the banks, which said that on average the bank-participants in the research are ready to spend about 26% of profit for further improvement of IT infrastructure and technical upgrading.

As M-Info told ArmInfo correspondent, the purpose of this research is to analyze the banking sector of Armenia from the point of view of usage and demand for IT by the commercial banks of Armenia. The total of 18 out of 21 commercial banks functioning in Armenia were investigated. BTA Bank Armenia, ACBA Credit Agricol Bank and Inecobank refused to take part in the research. The total of 84 employees of commercial banks, chiefly from leadership, took part in the poll.

According to the results of the research, specialists say that almost all the banks have similar strategic development directions. In particular, 14 banks said that "crediting of corporative customers" is one of the key directions of strategic development; 12 banks - "crediting of individual persons" (consumer crediting, credit cards and mortgage); 11 banks - "performance of service to current accounts and corporative customers", as well as "implementation of trade operations of corporative customers". Only 8 banks are interested in development of investment products like strategic direction of development. Only 9 banks said that "introduction of new products" is one of the directions of strategic development.

The following directions were mentioned in the list of the main priorities of development of the banks in the sphere of finances management: analytic, risks management, operation activity, planning and budgeting and support of the main activity. According to the analysis, management of risks is the most priority aspect for management of finances (17 respondents) and planning and budgeting (13 respondents). "Salary and staff" was priority for 9 banks.

The research showed that in many cases top-management of Armenian commercial banks is partly satisfied or is not satisfied with the current IT situation. The leaders of the banks see the future of IT system development in their own elaborations - 68.75%, and only 31.25% - in purchasing of software of other designers.

As executive directors of the banks said, intensive upgrading and IT development in the banking sector is planned chiefly in the short-term (41%) and mid-term prospect (47%). As they said, the banks are ready on average to spend about 32% of profit for further improvement of IT infrastructure and technical upgrading.

According to the official data, in 2010 the aggregate net profit of 21 commercial banks of Armenia amounted to about 33.7 bln drams or about $90 mln. That is to say, one can suppose that $28.8 mln may be directed to intensive upgrading and development of IT in the banking sector.

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Armenian banks are ready to spend about 32% of their profit to improve IT infrastructures and technical upgrading