Banks’ IT Spending to Grow in 2011

Celent’s analyst team recently released a report predicting a growth in bank IT spending for 2011. According to the analysts, financial services firms around the globe will spend $363.8 billion on technology. Specifically, banks’ global IT spending is anticipated to reach $169.6 billion this year, a 4.1 percent increase from 2010. While the increase in spending is noted as an optimistic point for financial services firms and banks, Penny Crosman at Bank Systems and Technology warns it may not bring new projects.

Crosman writes,

“The bad news is, the bulk of this spending will be on maintaining IT infrastructure, rather than new IT projects and innovation: U.S. banks will spend $35.5 billion on IT maintenance in 2011, the analysts say. “The maintenance versus new investments conundrum is still plaguing North American banks,” the Celent report notes. “Byzantine legacy systems pervade banking and are a critical component of operations.” However, banks are working to reduce this burden by building SOA-based middle layers intended to lower maintenance costs, reduce application redundancy, assure data integrity and facilitate data sharing, the report suggests.”

Is your financial institution investing in new IT projects this year? Let us know in the comments section below.

Written by Banking.com Staff