Management Strategies

05:15 PM
Ed Lucente, Manager, Verari Financial Services (San Diego)
Ed Lucente, Manager, Verari Financial Services (San Diego)
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Capital Conservation and Energy Efficiency Technology on the Horizon in 2009

IT investment capital will become more scarce as banks have to preserve for future loans, and execs will look to manage asset life cycles next year.

One of the biggest changes in banks' IT strategies in 2009 will be a concerted effort to conserve capital as bankers are increasingly concerned about their capital cushion -- to the point where their lending practices have dried up considerably due to the global credit crisis. Since banks can't make money unless they lend, they will preserve their capital as a basis for future loans versus deploying scarce capital for IT asset acquisitions. Therefore operating lease financing will become an even more attractive financing vehicle for banks since it enables flexible financing from operating budgets versus capital budgets.

A second change will be mounting pressure at executive levels to manage IT asset life cycles with greater discipline in order to reduce costs and dispose of older equipment in compliance with local laws and corporate green initiatives. A key driver is the sheer number of data center consolidation projects currently under way in the banking industry -- thousands of servers are being disposed of and replaced with more-energy-efficient technology. IDC estimates that 40 percent of all data centers will be replaced over the next 10 years with larger, more energy- and space-efficient data centers. This has become a business imperative to remain competitive.

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