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  5. North American Corporate Banking IT Priorities and Strategy in 2023

North American Corporate Banking IT Priorities and Strategy in 2023

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30 August 2023
Colin Kerr
Gareth Lodge

Overcoming compliance and legacy inertia with agility and client focus​

Abstract

Corporate Banking IT spending continues to grow strongly as global economies shake off the impacts of the COVID-19 pandemic and the subsequent economic and banking industry challenges. Bank margins have been under pressure in a rising rate environment, and regional banks in the US must shake off a brief crisis and the potential impacts that may yet reverberate.

Banks also face a constantly changing technology landscape as fintechs and pioneering banks develop new value propositions and services – yet this also brings new regulatory scrutiny. As a result, banks must decide how to engage in these new ecosystems and craft new ways to win and retain corporate clients while addressing regulators’ concerns.

To shed light on the strategic and product-level technology priorities of the industry, Celent has once again run its Technology Insight and Strategy Survey. In capturing the insights and opinions of 214 senior executives across Corporate Banking globally, we have a granular view on the leading technology priorities for the year ahead, as well as the products and processes that will see the greatest change. In this report, we analyze the responses from 39 Corporate Banking executives in North America (US and Canada).

Selected key findings include:

  • Bank IT spending continues accelerating in North America, albeit with some distinct variations. Celent’s latest data shows that IT spending for corporate banking rose an average of 4.6% in 2023 and is expected to increase by a further 5.8% in 2024. These are above the global average; however, banks in Canada lag the global, regional, and US averages by quite a margin.
  • Concerningly, 69% of North American survey respondents agreed that “the threat from fintechs is increasing” – but only 56% of responding banks say they have a strategy for engaging in the new banking ecosystem. That is 18% below the global average and is indicative of the challenge this market trend poses to banks that have not yet engaged.
  • The top three drivers for IT spend in the region are: meeting compliance and regulatory requirements, greater speed and agility, and addressing the challenge of replacing/modernizing legacy platforms.
  • Technology priorities appear to have been influenced heavily by the rapid rise of AI. The quest for “intelligent banking” has driven a strong focus on advanced analytics, AI, and ML to the top of the priority list, along with the essential step of improving the data platform foundation.
  • In terms of business and product priorities, there is a clear leader. Corporate digital channels was the top overall priority both worldwide and in North America. Whatever the product or service, the banking experience matters to clients.
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