Banking and security firms in Thailand are predicted to spend 48.9 billion baht on technology products and services this year, down 1.7% from 2019, says global research and advisory firm Gartner.
The drop is in line with the global trend in spending, which is expected to be subdued by the pandemic.
In Thailand, the biggest spending is expected in communication services, amounting to 14.8 billion baht, followed by IT services (10.9 billion baht), internal services (6.8 billion baht) and devices (6 billion baht).
Next year, total spending is expected to rise 6.6% to 52.1 billion baht.
At the global level, IT spending by the banking and securities sector is expected to fall 4.7% to US$513.9 billion this year before rebounding 6.6% to $547.8 billion in 2021.
For this year, spending on devices, such as PCs and mobile gadgets, could see the biggest contraction at 12.1%, followed by data centre systems with an 11.1% drop.
"Covid-19 has not only caused uncertainty within the banking and securities industry this year, but also a shift in the way customers must interact with their financial institutions," said Jeff Casey, senior director analyst at Gartner. "These firms continue to respond to the emerging needs of customers amid ongoing business closures and dwindling government support."
According to Gartner, the industry's initial response to the pandemic crisis is to ensure remote working that can respond to "increased credit needs, digital channel education and reassuring unnerved investors".
During the early stage of the crisis, Gartner said, banks placed emphasis on tech spending related to operations, supply chain, revenue and workforce.
"With a better understanding of the impact of Covid-19, banks and securities firms are now accelerating automation initiatives, such as customer-facing chatbots, robotic process automation and end-to-end account origination solutions," Mr Casey said.
Gartner said spending on IT services could see a drop of 4.4% to $195.6 billion, due to the pandemic taking a toll on contract sizes and services.
The drop, however, will be short-lived, Mr Casey said, adding: "IT services spending will begin to rebound as banks accelerate reprioritised modernisation initiatives in 2021."
