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Banks’ Risk IT Spending to See Modest Growth

Bank IT spending is likely to come under greater scrutiny as the credit crisis continues.

One way banks can do that is to utilize system deployments, such as analytics, more efficiently, Rogers says. "Don't confine analytics to a specialist group — make them easily deployed throughout the organization," he advises. "Banks will look for relevant models that can be managed and customized in a controlled environment so they can react to the market. So it's not just the analytics, but how they're deployed in the bank that matters."

Oliver Wyman's Howard-Jones says banks need to be more innovative when it comes to technology, including how they do business with vendors. "Banks should take a collaborative approach to software development, where they work with the vendors and share the royalties when the vendor sells the software," he contends. "It makes business sense to share the development risk. Many times, banks' expectations regarding plug-and-play capabilities of a solution are not met, so they must spend more to customize it. This isn't necessarily intentional by the vendors. But these hidden costs add up. With a collaborative development approach, the risk around these hidden costs can be eliminated."

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