Worldwide banking and investment services IT spending is forecast to rise 8.1% year-on-year to US652.1 billion in 2023, according to Gartner, Inc.
In a statement on Wednesday (June 21), the consulting firm said spending on software will see the largest growth, with an increase of 13.5% in 2023.
Gartner director analyst Debbie Buckland said current economic headwinds have changed the context for technology investments in banking and investment services this year.
“Rather than cutting IT budgets, organisations are spending more on the types of technologies that generate significantly higher business outcomes.
Spending on software, for example, is shifting away from building it in-house, in favour of buying solutions that generate value from investments more rapidly,” she said.
Investment In Cloud
According to the Gartner 2023 CIO and Technology Executive Survey, banking and investment services CIOs (chief information officers) will spend the largest amount of new or additional funding in 2023 on cybersecurity, data and analytics, integration technologies and cloud.
Gartner said more than half plan to increase investments in cloud, while reducing IT spending in their own data centres.
It said this is reflected by slower growth in data centre systems spending, from 13.2% in 2022 to 5.7% in 2023.
Banks are disengaging from tangible assets and capital expenditure (capex), in favour of adopting services and operating expenditure (opex) to meet evolving customer and market expectations.
IT Services
Gartner said that driven by the increased use of consulting services and infrastructure as a service (IaaS), IT services will be the largest spending category, forecast to reach almost US$270 billion in 2023.
This is an increase of 9.3% over 2022, reflecting the increasingly important role IT service providers play in helping banking and investment services organisations navigate emerging opportunities and challenges.
Buckland said economic uncertainty is leading organisations to break down long-term contracts into multiple shorter projects.
“They’re also reluctant to sign new contracts, commit to long-term initiatives or take on new technology partners, which is driving an increase in the use of IT consulting services,” she said.
Source: The Edge Markets