More effective IT vendor management could save banks between 10% and 30% of their technology expenditure according to a US study conducted by Silicon Valley-based research firm The FactPoint Group for ITM Software.
Banks currently spend between six per cent and 12% of revenue on IT, with around half of this going to vendors, says ITM.
The survey of senior executives at 34 medium-sized national and regional banks found that IT vendor management is becoming increasingly important as financial firms struggle to reduce costs and comply with increasing regulations.
ITM says one respondent surveyed cited IT vendor management as one of the most important requirements, especially as the Federal Deposit Insurance Corporation (FDIC) is increasing its focus on third party vendor relationships.
According to the poll, nearly two thirds of respondents consider IT vendor management more complex, important and requiring more expertise than the management of non-IT vendors.
The research also found that regulatory compliance has elevated the importance of IT vendor management from a department-level process to an enterprise-wide one. Reputation management was also found to be a key driver for IT vendor management.