Gartner projects that global spending on IT in the banking and investment services sector will grow by 8.1 percent, reaching $652.1 billion in 2023.
The report indicates that various areas within this sector will experience different trends in spending:
Data Center Systems: Expenditure on data center systems is expected to increase by 5.4 percent, reaching $36.433 billion in 2023.
Devices: Spending on devices is anticipated to decrease by 2.1 percent, amounting to $37.149 billion in 2023.
Internal Services: Banking and investment services organizations are projected to spend $55.156 billion on internal services, representing a growth of 4.2 percent.
IT Services: Investment in IT services is forecasted to rise by 9.3 percent, reaching $269.735 billion in 2023.
Software: Expenditure on software is expected to grow by 13.5 percent, reaching $174.014 billion in 2023.
Telecom Services: Spending on telecom services is projected to increase by 2.4 percent, amounting to $79.599 billion in 2023.
According to Debbie Buckland, Director Analyst at Gartner, organizations are shifting their focus towards technologies that provide greater business outcomes instead of cutting IT budgets. This shift is evident in the increasing preference for purchasing software solutions that deliver value rapidly, rather than developing them in-house.
The Gartner 2023 CIO and Technology Executive Survey reveals that banking and investment services CIOs plan to allocate a significant portion of new or additional funds to cybersecurity, data and analytics, integration technologies, and cloud solutions.
Over half of these organizations intend to increase investments in cloud services while reducing spending on their own data centers. As a result, the growth rate for data center systems spending is expected to slow down from 13.2 percent in 2022 to 5.7 percent in 2023.
This reflects the industry’s inclination towards adopting services and operating expenditure (opex) rather than tangible assets and capital expenditure (capex) to meet evolving customer and market expectations.
Pete Redshaw, VP Analyst at Gartner, highlights the shift in priorities among banking and investment services CIOs towards more conservative objectives that promote resilient and sustainable growth, such as enhancing customer experience (CX) and improving operational efficiency.
The increased utilization of consulting services and infrastructure as a service (IaaS) is driving the growth of IT services spending, which is anticipated to reach nearly $270 billion in 2023, reflecting a 9.3 percent increase from 2022. This emphasizes the crucial role played by IT service providers in helping banking and investment services organizations navigate emerging opportunities and challenges.
Furthermore, due to the global talent shortage affecting the banking and investment services industry, spending on internal services is predicted to grow by 4.2 percent in 2023. This investment aims to support the rising costs associated with talent acquisition and retention.