Half of banks around the world consider reducing costs in IT operations to be a significant challenge. At 80% and 65% respectively, this number is even higher in Germany and France. From a business and IT perspective, cost reductions represent one of the biggest challenges for banks around the world. At the same time many banks are increasing their IT budgets. This is linked to the ability to achieve a more state-of-the-art structure for the IT landscape as well as overcoming challenges such as satisfying customers’ needs and introducing innovations, says a news study.
Although IT efficiency and secure and smooth IT operations remain the top priority for IT decision-makers, business-driven challenges are becoming increasingly important. These are the key outcomes of a CIO study undertaken by the market research and strategic consulting company Pierre Audoin Consultants (PAC) in the banking sector.
More than a third expect this to be an even greater challenge in future. Having said that, IT budgets in many financial institutions are on the rise: just under 50% of the banking IT decision-makers surveyed have a bigger IT budget this year than last. Conversely, 17% of banks have reduced their IT budgets.
Modernising the IT landscape is one of the foremost issues on banks’ IT agenda. Almost half of the IT decision-makers interviewed in the course of the study expect the budgets made available for this purpose to rise in the next two years. Conversely, 9% are planning to spend less on modernisation.
Alongside the modernisation of the IT landscape, there are a range of other areas where higher IT expenditure is anticipated. For example, 61% of banks in both Germany and France are expecting budgets in the area of IT security and cyber-security to increase. Further, half of UK banks are planning to increase investment in digital transformation in the coming two years.
“Many banks are prepared to invest in state-of-the-art technology and are making bigger budgets available to do so. However, whilst banks are still making savings, these tend to be in other areas – predominantly IT operations,” says Eike Bieber, Senior Consultant – Banking and Insurance and author of the study. “At the same time, we anticipate that banks will continue to be very circumspect about their IT investments and will take a gradual approach to topics such as digital transformation.”