IT Spending in Banking: A North American Perspective
North American IT spending is on the uptick and is expected to be 4% higher in 2011. Spending will continue to rise in 2012, reaching US$55.9 billion, an increase of 4.6%. We are not completely out of the woods, but the good news is that the turnaround has begun.
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. North American bank IT spending will grow from US$51.4 billion in 2010 to US$53.4 billion in 2011. Retail banking IT spending is on the rise, spending on corporate banking will continue to be strong, spending on software and services is on the rise, and new investment spending is skyrocketing.
“In an ideal world, spending on new investments and innovation would take up the lion’s share of the pie. Although maintenance spending dominates, the good news is that the percentage of funds allocated to maintenance at US and Canadian banks is on the decline,” says Jacob Jegher, Senior Analyst with Celent's Banking Group and author of the report.
“After a very challenging couple of years, investments are steadily climbing in both retail and corporate banking. While the growth is encouraging, financial institutions are indicating increased scrutiny of projects and short return on investment timelines,” he adds. “It’s still difficult to get new projects funded because most banks have laundry lists of enhancements and strategic initiatives that they would like to take on.”
This report examines the regional breakdowns of retail versus wholesale spending, internal versus external spending, and maintenance spending versus new investments. The report also outlines several key North American banking technology trends and growth areas for 2011.