It is no secret that financial institutions, along with telecom companies, are heavy information technology (IT) users, spending more on IT, including software, hardware and services, than other firms. This year won’t be any different. Two recently released surveys point out that banks’ IT spending is increasing worldwide.
Ovum forecasts that retail banks spending on IT will grow 3.4%, reaching U.S.$118.6 billion in 2013, as they move away from cost cutting and increase IT spending to focus on customer satisfaction and revenue growth. The survey also found that North American banks are expected to increase their IT spending by 3.3% this year, ahead of their European counterparts (1.8%) and second to Asia (5.1%).
Another survey, released by Celent, reports that total bank IT spending across North America, Europe and Asia-Pacific will grow to U.S.$179.2 billion in 2013, an increase of approximately 3.4% over 2012.
In its new Business Trends report, Ovum suggests that within North America, the continuing shift toward greater IT spending signals a reduction of the cost-cutting measures seen previously in the global banking industry.
Ovum predicts that banks will focus on digital channels, such as online and mobile banking, and digital marketing activities.
Among digital channels, Ovum argues that mobile banking is the clear IT investment priority in 2013, as retail banks attempt to capitalize on the features unique to mobile devices, such as location-based services. Overall, spending on online channels (including traditional online banking services and mobile-browser-based banking services) is expected to grow 6.2% in 2013.
The research and advisory firm Celent predicts that North American banks’ spending will grow by a solid 4.0% in 2013 to U.S.$56.9 billion. This figure will increase to 4.4% in 2014 to U.S.$59.4 billion. In Europe, Celent expects banks to grow 0.4% in 2013 to U.S.$59.5 billion and growth to continue to be flat through 2015, increasing by just 0.3% to U.S.$59.9 billion.
In its report, Celent notes that the majority of the growth is coming from Asia-Pacific banks: spending by banks in this region will grow by 5.9% in 2013 to U.S.$62.3 billion. This growth will continue in 2014 to reach U.S.$66.5 billion.
