Spending on IT by the US banking industry will reach $60 billion by 2007, according to forecasts from market intelligence firm IDC.
IDC surveyed 27 US banks about the way in which IT will be used to address strategic priorities. Compliance with regulatory requirements was the leading response, followed by CRM, risk management, cost reduction and attracting new business. With these priorities in mind, IDC says it expects overall IT spending by US banks to grow by more than five per cent between 2002 and 2007.
IDC also predicts that banks will use their technology investments in an attempt to cut costs and increase revenues. Jessica Goepfert, programme manager, US IT opportunity, financial services, IDC, says technology can have a tremendous impact on banks' top and bottom lines, enabling them to capitalise on growth opportunities and deliver services while lowering costs.
"Forward-thinking banks will turn to technology to meet their strategic priorities as well as to create greater operational efficiency," she says.
The research shows that delivery channels will continue to grab the largest share of IT spending, while back office functions will be the fastest growing area and will vie for the largest share of functional IT investment by 2007. IT spending on retail and wholesale products will remain balanced and grow at a slower rate throughout the forecast period.