Corporate Banking Technology Spending Forecasts 2022-2027: Growing Out of the Pandemic
With the worst effects of the pandemic now having receded, the corporate banking industry is back to focusing on revenue and profitability. As such, technology-driven initiatives to support the topline and greater operational efficiency will see investment continue to grow across the industry. Corporate bank IT spending will reach $158 billion in 2027. This is an increase of 5.4% on 2021 and is up 11.9% on the $113 billion in 2020.
The Outlook for 2023 Remains Positive
The outlook for IT spending in 2023 remains positive. Celent expects IT spending next year to reach $130 billion, which will be an increase of 4.9% on 2022. While down from 2022, it remains comfortably above the prepandemic growth rate. However, as we enter what may be an unstable macroeconomic environment, the priorities of many financial institutions may change.
IT Spending is Expected to Reach $158 Billion by 2027
IT spending growth is set to continue over the medium term, as banks increase their focus on technology investment to address their growth and operational objectives. Celent expects IT spending in corporate banking to reach $158 billion by 2027. This reflects an average annual growth rate of 4.6% over the 2022–27 forecast period, which is ahead of the longer-term trend. Inflationary pressures are one factor behind this increase, but there is also a growing emphasis across the industry on accelerating the process of digital transformation.
Applications Will be the Biggest Spend Area, But External Services Will Grow Most Quickly
The biggest area of spending for banks in 2027 will be applications. Celent forecasts total spend in this area will grow by an average of 5.2% a year from 2022 and will reach $41.7 bn, as banks continue to invest in product and service innovation. External services—which include areas such as systems integration, consultancy, and cloud services—will remain the second-largest spending area in 2027. Spending will grow at an average rate of 4.8% and reach $40.7 billion by the end of 2027.