More NewsReport Claims Banks IT Budgets Will Continue to Grow

Report Claims Banks IT Budgets Will Continue to Grow

Research from TowerGroup has found that overall IT spending among US commercial banks will grow slowly through 2007, moving from a total of US$33.8 billion in 2003 to US$38.2 billion in 2007 (a compound annual growth rate of 3.3 per cent). Yet amid discussions of budget freezes and drops in IT spending, TowerGroup believes that the new emphasis on strategic cost management adopted by many banks in 2001 is now bearing fruit – opening the door to increased investment in core pockets of technology. ‘While the banking industry will see only nominal increases in total IT spending through 2007, we believe that the aggregate numbers don’t paint the full picture,’ said Virginia Garcia, senior analyst in the Financial Services Strategies & IT Investments practice at TowerGroup. ‘The nuances are in the interplay among the three core areas of bank IT investment: maintenance (the cost of maintaining existing IT infrastructures); replacement (the cost for replacing legacy and other systems); and new technology. The impact of many of the cost management projects put in place over the past few years will become visible in 2004, shifting the dynamic between these three primary investment buckets.’

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