Information technology spending by worldwide banking and investment service businesses is forecast to grow this year by 8.1% to US$652.1 billion, according to Gartner Inc.
Spending on software will record the largest growth with an increase of 13.5% from 2022, the tech industry research and consulting group said.
Spending in Thailand is forecast to reach 97 billion baht, representing 7.1% growth overall, though spending on software will rise 15.2%, the firm found. Spending on data centre systems in the country is expected to see 9.3% growth.
"Current economic headwinds have changed the context for technology investments in banking and investment services this year," said Debbie Buckland, director-analyst at Gartner.
"Rather than cutting IT budgets, organisations are spending more on the types of technologies that generate significantly higher business outcomes.
"Spending on software, for example, is shifting away from building it in-house, in favour of buying solutions that generate value from investments more rapidly."
According to the Gartner 2023 CIO and Technology Executive Survey, chief investment officers of banking and investment services firms will spend the largest amount of new or additional funding in 2023 on cybersecurity, data and analytics, integration technologies and cloud.
CLOUD A PRIORITY
More than half plan to increase investments in cloud services, while reducing IT spending in their own data centres. This is reflected by slower growth in data centre systems spending, from 13.2% in 2022 to 5.7% in 2023.
Banks are disengaging from tangible assets and capital expenditure in favour of adopting services and operating expenditure to meet evolving customer and market expectations.
"To deal with the current economic climate, banking and investment services CIOs are now prioritising more conservative objectives that support resilient and sustainable growth, such as a better customer experience and more efficient operations," said Pete Redshaw, VP analyst at Gartner.
"This is a change from previous years when outright growth -- new territories, new customers, new lines of business -- was the primary objective of banking CEOs."
Driven by the increased use of consulting services and infrastructure as a service (IaaS), IT services will be the largest spending category, forecast to reach almost $270 billion in 2023.
This represents an increase of 9.3% over 2022, reflecting the increasingly important role IT service providers play in helping banking and investment services organisations navigate emerging opportunities and challenges.
"Economic uncertainty is leading organisations to break down long-term contracts into multiple shorter projects," said Ms Buckland. "They're also reluctant to sign new contracts, commit to long-term initiatives or take on new technology partners, which is driving an increase in the use of IT consulting services."
TALENT SHORTAGE
With the global talent shortage affecting banking and investment services organisations, spending on internal services will increase by 4.2% in 2023 to support the increased costs of hiring and retaining talent, Gartner found.
"Even after the recent widespread redundancies at many of the technology giants, banks are no longer seen automatically by top talent as the most desirable, rewarding or stimulating destinations," said Mr Redshaw.
"More innovative solutions are needed, such as dropping the requirement for university education and adding benefits such as lifetime retraining, hybrid teams, agile methods and fintech partnerships."
