Will more memory improve slow server during daily backups?

My server really slows down every night during daily backups, with 'top' showing very high percentage of 'wa' - ie. i/o wait cpu time. I've changed from using compression backups to incremental uncompressed backups, but while that helps, it doesn't solve the problem.

I realise the problem is caused by heavy disk access - but would adding more memory to my VPS help? Does more memory allow better file caching and more efficient disk access?

If this won't help, any suggestions? I want to use CPanel's backup process because it does a consistent capture of the MySQL databases - just copying the MySQL table files seems a bit risky.