North American Financial Institutions Will Spend $73.8 Billion on IT in 2014, According to TBR’s Banking and Financial Services SourceIT Report
Large North American financial institutions will spend $73.8 billion on IT improvements across software, hardware and professional services in 2014 as firms transition investments from “run the bank” to “change the bank,” according to TBR’s Banking and Financial Services SourceIT report.
HAMPTON, NH (July 31, 2013) — Large North American financial institutions will spend $73.8 billion on IT improvements across software, hardware and professional services in 2014 as firms transition investments from “run the bank” to “change the bank,” according to TBR’s Banking and Financial Services SourceIT report. The overall 2014 IT budget growth rate hovers at 2%, and large banking organizations are increasing investment in multichannel banking and data management to improve system performance to ultimately meet customer demand for improved service and an enhanced user experience.
“Our IT investment strategy is increasingly becoming more practical; we are looking at new business models that we do not run fully in-house and on-premises,” said a vice president of Enterprise and Infrastructure during a SourceIT interview. “While we are not leading-edge, we are moving from lagging and ultra conservative to a more parity position, which I believe will evolve to more leading in the next two to five years. Our IT platforms can become a competitive distinction, and if modeled correctly, can free our resources to work on higher-value tasks.”
According to survey results, banks favor vendors established in the financial services industry and with which they have pre-existing relationships to implement the required improvements. This buyer behavior signals significant opportunity for identified vendors, as TBR’s Banking and Financial Services SourceIT research shows that 74% of decision makers are at Empowered organizations, which are highly aggressive IT adopters with highly distributed IT spending. This represents significant opportunity for vendors across software, hardware, networking and professional services.
TBR’s Banking and Financial Services SourceIT report provides deep business insights into the IT investments financial institutions are planning based on industry change, internal mandates and customer expectations. “IT is clearly becoming more strategic for financial services companies, helping them maintain the status quo and acting as an accelerator for strategic business shifts,” said TBR Senior Analyst Allan Krans. “Although budget increases are modest, we see strong commitment and funding for IT projects that positively impact the customer experience occurring during the next 18 months.” The report integrates surveys and in-depth interviews with IT and business executives at 201 large North American financial organizations, representing 20% of the IT opportunity and mapping IT spending across software, infrastructure and professional services in 2014. The representative sample includes institutions of 950 employees or more with $1 billion or more in assets, across commercial and savings banks, financial transactions processing firms, insurance, credit unions, and reserve and clearinghouse services. Respondents reported budget plans, decision drivers and vendor relationships across the enterprise software landscape. Key categories detailed in the report include industry applications, back-office business applications, productivity, BI and analytics, database and middleware, systems management and security. More than 35 vendors are covered in the Banking and Financial Services SourceIT report, including ADP, Dell, EMC, Equifax, Fair Isaac FICO, HP, IBM, Microsoft, Oracle, Salesforce.com and SAP.
At 2 p.m. EST on Aug. 1, 2013, Krans will present key high-level findings in the TBR webinar, “Where large banking and financial services institutions are headed — How IT vendors can capture opportunity”. Register for this event at https://tbrevents.webex.com/tbrevents/onstage/g.php?t=a&d=664761770.
TBR launched the SourceIT research program in January 2013, providing an opportunity playbook into specific large enterprise market segments. SourceIT reports provide TBR’s clients with clear, actionable insight that can be leveraged to:
- Identify opportunity by highlighting the business and IT strategy drivers and demands in specific market segments
- Target IT purchasing decision makers by explaining purchasing scenarios and identifying where in the business or IT organizations decisions to purchase will be made
- Improve corporate positioning against competition by targeting customer needs and managing rivals
The Retail; Federal and Public Sector; Telecom Service Providers; and Healthcare SourceIT reports are available. Manufacturing; Energy and Utilities; and Transport and Logistics SourceIT industry reports will publish in the fall of 2013.
For more information please contact Software and Cloud Practice Director Stuart Williams at 603.929.1166 ext. 1832, or Vice President of Sales James McIlroy at 603.929.1166 ext. 1813.
Technology Business Research Inc. is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, professional services, telecom and enterprise network vendors, and operators. Serving a global clientele, TBR provides timely and actionable market research and business intelligence in formats that are tailored to clients’ needs. Our analysts are available to further address client-specific issues or information needs on an inquiry or proprietary consulting basis.
TBR has been empowering corporate decision makers since 1996. For more information, please visit http://www.tbri.com.