Dive Brief:
- Worldwide IT spending in the banking industry is forecast to surpass $387 billion in 2019, a 2.8% increase from last year, according to a report from research firm Gartner.
- Software investment is the segment expected to see the highest increase in investment, with Gartner predicting a 7.9% increase from the previous year. The banking industry is expected to invest $65.3 billion in software for 2019.
- Despite an overall increase in IT spending, banks are expected to scale back investment in several areas in 2019, according to the report. Gartner found investment in devices will decline 1.2%, telecom services investment will drop 0.2% and spend in data center systems will decline by 2.5%.
Dive Insight:
Software investment is expected to continue to grow in the banking sector, with Gartner predicting an annual growth of at least 7.8% through 2022. The banking industry's investment in the segment is expected to surpass $82.9 billion per year by 2022, Gartner estimates.
While some banks may be reluctant to increase their spending on emerging technologies such as artificial intelligence until they can see some concrete returns, others will be looking to use the technology to transform the customer experience and reduce internal operation costs.
Gartner analyst Jeff Casey said banks will be choosing to implement AI, data science platforms and automation over traditional IT infrastructure investments.
However, Casey said the industry will continue to be constrained by a reliance on legacy systems as it seeks ways to optimize customer interactions.
"Digital-only offerings, built on a modern technology stack, will lead the introduction of innovations in customer experience," he said.
