North American bank IT spending grew 4.1% from
US$46.0 billion in 2006 to US$47.9 billion in 2007. In light of uncertain
market conditions, bank IT spending levels in 2008 will experience a
slowdown for the first time in several years, climbing a modest 3.6% to
reach just under US$50 billion.
In a new report, IT Spending in Banking: A North
American Perspective, Celent examines, analyzes, and contrasts the IT
spending patterns of US and Canadian banks. While 2007 spending growth
levels remained relatively constant, 2008 bank IT spending growth will
experience a slowdown for the first time in several years.
While a few of the large Canadian banks have had
some exposure to the US subprime crisis, it will have little impact on IT
spending. Spending will continue to flow as most Canadian banks churn out
strong profits and take advantage of the strong Canadian dollar. Canadian bank IT spending will grow by 4.3% in 2008 to
US$6.5 billion.
"The credit crunch and looming economic
uncertainty have US banks tightening their belts, says Jacob
Jegher, senior analyst in Celent's banking group and co-author
of the report. "Banks of all sizes are slashing budgets and placing
significant emphasis on keeping costs under control. This contraction will
push numerous IT projects out of the picture and make internal competition
for IT resources that much greater. IT dollars will be hard to come by
after compliance/regulatory spending and maintenance expenditures. This is
a difficult position for banks to be in, particularly since the market is
still hyper-competitive."
This report examines the regional breakdowns of
retail versus wholesale spending, internal versus external spending, as
well as spending on maintenance versus new investments. The report also
outlines several key North American banking technology trends and growth
areas for 2008.
This 21-page report contains 7 figures and 1 table.
A table of
contents is available online.
