In a new report on bank IT budgets, Celent senior analyst Jacob Jegher says that North American bank IT spending is on the uptick and will be about 4% higher in 2011. Spending will continue to rise in 2012, reaching $55.9 billion, an increase of 4.6%, he estimates.
The report, IT Spending in Banking: A North American Perspective, examines the IT spending patterns of U.S. and Canadian banks. North American bank IT spending will grow from $51.4 billion in 2010 to $53.4 billion in 2011, Celent analysts say. 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 lions share of the pie," Jegher says. "Although maintenance spending dominates, the good news is that the percentage of funds allocated to maintenance at U.S. and Canadian banks is on the decline. 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. 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."