The firm warns that although the industry is not "completely out of the woods", the turnaround has begun, with tech spending by banks in Canada and the US rising a further 4.6% in 2012 before hitting $58.3 billion in 2013.

Celent predicts retail banking IT spending will grow by 3.2% this year after a flat 2010, with an emphasis on refreshing front end features. Banks are increasingly looking at upgrading their online offerings as they realise they have fallen behind the times while also pushing PFM and mobile.

After strong growth in 2010, wholesale banking spending will continue to prosper with a 6.1% rise this year, says Celent. Much of the emphasis is on corporate cash management as banks look to upgrade their ageing platforms to woo business.

Software spending will see solid and consistent growth over the next few years with banks increasingly making use of external providers as they try to focus on core competencies. Spending on external software by North American banks will rise by 7.5% to $9.9 billion in 2011 before hitting $11.4 billion in 2013.

Meanwhile, investment spending is "skyrocketing" - up 12.9% this year to $12.8 billion - as banks across North America increasingly emphasise innovation and new product development.

However, maintenance still dominates, accounting for around three quarters of IT budgets. In 2011, North American banks will spend $40.7 billion on maintaining systems and operations.

Jacob Jegher, senior analyst, banking group, Celent, says: "While the growth is encouraging, financial institutions are indicating increased scrutiny of projects and short return on investment timelines. It's still difficult to get new projects funded because most banks have laundry lists of enhancements and strategic initiatives that they would like to take on."