Financial institutions across the Asia Pacific region are increasingly working closely with their technology partners to develop resilience, strategies for the present, and digitalization for their competitive edge.

In 2024, digital transformation (DX) spending by the Asia Pacific banking sector has reached US$30.4 billion, marking a 19.4% increase from 2023. IDC predicts that this spending will continue to rise, with a compound annual growth rate (CAGR) of 18.4%, reaching approximately US$48.6 billion by 2027.

According to a recent IDC report, IDC Industry Market Forecast: Asia Pacific Banking, 2024, software investments will significantly shape the DX spending by Asian banks, with a projected CAGR of 21.1% by 2027. The increase in software investments is attributed to the need for big data and analytics (BDA) and artificial intelligence (AI)-powered solutions by banks to improve decision making and create hypersonalised banking experiences.

The report also revealed that services and hardware investments will reach a projected CAGR of 16.1% and 10.3% respectively. This suggests a balanced approach adopted by Asian banks towards upgrading digital infrastructure and engaging expert support to implement digital initiatives. This balanced approach is further emphasised by significant spending in areas such as infrastructure maintenance and continuing support for large-scale operations as stated in the report.