IT spend is on the rise for banks. To deliver the future of banking, managing IT spend needs a new approach.
Based on our experience and research from the past economic crisis, the most mature IT organizations responded faster during the downturn.
IT total spend management is a crucial part of the forward-looking strategy, and there are three critical areas banks must consider: (1) creating transparency through granular analytics, (2) setting up the right IT spend strategy, and (3) building capability to operationalize this strategy while measuring the value created.
IT investment development
IT spend is on the rise for banks
Banks have experienced a short-term rise in technology spend over the past five years. Moreover, when examining the last wave of strategic plans, we see that even larger transformation budgets were announced to shift to digital and modernize an aging infrastructure.
Through 2023, IT spend as a percentage of revenue is expected to be as much as 9% for some medium to large international banks (see figure below).
COVID-19 has amplified demand
The COVID-19 crisis exemplifies that a single event can have extreme impacts at a high magnitude. CEOs, COOs, and CIOs moved quickly to build responses in emergency mode and secured business continuity. This new environment forced banks to accelerate on digital.
Digitalization of customer journeys, remote working at scale, process efficiency, and IT security are areas now at the forefront.
To access the full review click here: arthur_d_little_viewpoint_banking_it_spend.pdf.
The review is by Global management consultancy, Arthur D. Little
