U.S. Banks To Escalate IT Spending
Fremont: IT spending by North American banks has been growing at a steady pace over the last few years and it is further expected to see a 4.5 percent hike in 2014, according to the latest report published by the financial research firm, Celent.
Retail banks, being focused on monetization of digital channels, banking innovation and enhancements to user experience, and omnichannel sales and service endeavors, are expected to post the highest growth rate. The study shows that wholesale banks will also increase their spending on technology to upgrade outdated cash and treasury management solutions.
The tech spending among banks will rise from $56.9 billion in 2013 to $59.5 billion in 2014. The report also reveals the growth will be consistent and with an increase of 4.6 percent it will reach $62.2 billion in 2015.
Jacob Jegher, Research Director, Celent Banking Group and author of the report points out that new investment spending are skyrocketing and maintenance allocations are declining, encouraging frequent news. He added “It’s still quite challenging to get projects funded, however. Projects are encouraged but highly scrutinized, and they come with the requirement of a fast return on investment.”
International Data Corporation (IDC) also arrived at a similar conclusion in their Financial Insights report. “Bankers continue to be selective with IT initiatives, focusing on those that can deliver value to their clients and the organization, while also satisfying the mandate of reducing costs and improving efficiency,” Karen Massey, Senior Analyst, Banking, IDC Financial Insights.