Large North American financial institutions will spend $73.8 billion on IT improvements across software, hardware and professional services in 2014 as firms transition investments from "run the bank" to "change the bank," according to technology market research and consulting firm Technology Business Research’s (TBR) Banking and Financial Services SourceIT report.
A concurrent report from the company estimates large U.S. enterprises will spend more than $3.8 billion in the next 12 months on converged systems, which TBR defines as pre-integrated or pre-validated stacks of compute, storage and networking hardware.
Back to financial institutions, the overall 2014 IT budget growth rate hovers at 2 percent, and the report noted large banking organizations are increasing investment in multichannel banking and data management to improve system performance to meet customer demand for improved service and an enhanced user experience.
"IT is clearly becoming more strategic for financial services companies, helping them maintain the status quo and acting as an accelerator for strategic business shifts," TBR senior analyst Allan Krans said in a statement. "Although budget increases are modest, we see strong commitment and funding for IT projects that positively impact the customer experience occurring during the next 18 months."
The report integrates surveys and interviews with IT and business executives at 201 large North American financial organizations, representing 20 percent of the IT opportunity and mapping IT spending across software, infrastructure and professional services in 2014. Key categories detailed in the report include industry applications, back-office business applications, productivity, BI and analytics, database and middleware, systems management and security.
According to survey results, banks favor vendors established in the financial services industry and with which they have pre-existing relationships to implement the required improvements, signaling significant opportunity for identified vendors. Research showed that nearly three-quarters (74 percent) of decision makers are at "empowered organizations"--highly aggressive IT adopters with highly distributed IT spending.
For the second study on converged systems, TBR surveyed more than 400 IT decision makers at medium and large enterprises as part of the report and determined the average budget allocated for a converged infrastructure solution is almost $900,000, with one-quarter of respondents anticipating to spend more than $1 million.
The report indicated the adoption of converged systems is gaining momentum across a wide range of industries, including retail, manufacturing, government and health care, with financial institutions and banks leading adoption rates.
"Customers are deploying converged systems to accommodate a wide range of workloads," Christian Perry, senior analyst for data centers and in TBR’s Computing Practice, said in a statement. "However, the workloads that influence the purchases of converged systems are not always the same as those actually deployed after purchase. This reveals that customers are finding use cases for these systems beyond what they expected prior to purchase."