Current economic uncertainties lead organizations to invest in Agile IT infrastructure
Gartner, the world's leading research and advisory firm, predicts that worldwide IT spending in financial and banking services will reach US$ 652 billion in 2023, an increase of 8.1% from 2022. further growth, with an addition of 13.5% in 2023.
Debbie Buckland, Director and Analyst at Gartner
"Current economic headwinds have changed the context for technology investments in banking and IT services this year," said Debbie Buckland, principal and analyst at Gartner. “Rather than cutting IT budgets, organizations are spending more on technologies that drive significantly greater business results. Overall software spending is falling as it moves away from being built in-house, in favor of purchasing solutions that more quickly generate business value from investments,” he says.
Cloud investment continues unabated – According to the survey Gartner 2023 CIO and Technology Executive Survey, banking and IT services chief information officers (CIOs) will spend the largest amount of their new 2023 budgets on cyber security, Data and Analytics, integration technologies and A cloud.
More than half of IT executives plan to increase cloud investments while also expecting to reduce IT spending on their own data centers. This is reflected in the slower growth of spending on Data Center systems, from 13.2% in 2022 to 5.7% in 2023. Banks are moving away from tangible assets and capital expenditures (CAPEX) in favor of service adoption and operating expenses (OPEX) to meet growing customer and market expectations.
“To cope with the current economic climate, CIOs from Bank services and investment are prioritizing more conservative goals that support resilient and sustainable growth, such as a better customer experience and more efficient operations,” he says. Pete Redshaw, Vice President and Analyst at Gartner . “This is a shift from previous years, when sheer growth – new territories, new customers, new lines of business – was the top objective for banking CEOs.”
IT services remain the largest spending segment – Driven by increased use of consulting services and Infrastructure as a Service (IaaS), IT services will lead the way in investment, forecast to reach nearly US$ 270 billion in 2023. This represents an increase of 9.3% compared to 2022, reflecting its increasingly important role. IT service providers help banking and IT service organizations navigate emerging opportunities and challenges.
“Economic uncertainty is causing organizations to split long-term contracts into multiple shorter projects,” says Buckland. “They are also reluctant to sign new deals, commit to long-term initiatives or hire new technology partners, which is driving an increase in the use of IT consulting services.”
Talent shortage driving spending on internal services – With global talent shortages impacting both banking and IT services organizations, spending on internal services will increase by 4.2% in 2023 to support rising costs of hiring and retaining talent. “Even after the recent widespread layoffs at many of the tech giants, banks are no longer automatically viewed by top talent as the most desirable, rewarding or exciting destinations,” says Redshaw. “More innovative solutions are needed, such as eliminating the college education requirement and adding benefits such as lifetime training, hybrid teams, agile methods and fintech partnerships.”
Gartner customers can read more at “Forecast: Enterprise IT Spending for the Worldwide Banking Market, 2021-2027, 1Q23 Update” and “2023 Technology Executive and CIO Agenda: A Perspective on IT and Banking Investments”.
Additional analyzes on the subject will be presented during the Gartner IT Symposium/Xpo, one of the largest technology events in the world and that will take place in several locations such as Gold Coast (Australia) from September 11th to 13th, Orlando (Florida) from 16th to 19th October, Barcelona (Spain) from November 6th to 9th, Tokyo (Japan) from November 13th to 15th and Kochi (India) from November 28th to 30th. At this conference, considered the world's most important for CIOs and other IT executives, Gartner analysts will explore the technology, insights and trends shaping the future of IT and business, as well as showing how to unlock the possibilities of Artificial Intelligence technology Generative for business transformation, cybersecurity, customer experience, data analytics, executive leadership and more. Follow conference news and updates on Twitter using the hashtag #GartnerSYM.
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