European Corporate Banking IT Priorities and Strategy in 2023

Corporate Banking IT spending continues to grow strongly as global economies shake off the impacts of the COVID-19 pandemic and the subsequent economic and banking industry challenges. However, there are clear differences in budget trends across Europe. While some parts of the region are continuing to see significant growth in budgets, others are barely seeing any growth at all. This may be a timing issue, but the drivers and priorities suggest something different.

To shed light on the strategic and product-level technology priorities of the industry, Celent has once again run its Technology Insight and Strategy Survey. In capturing the insights and opinions of 214 senior executives across Corporate Banking globally, we have a granular view on the leading technology priorities for the year ahead, as well as the products and processes that will see the greatest change. In this report, we analyze the responses from 85 Corporate Banking executives in Europe.

Selected key findings include:

• Budgets continue to slightly lag behind the global averages: in 2022 (2.4% vs. 2.6%), 2023 (3.9% vs. 4.2%), and 2024 (5.3% vs. 5.6%). Yet that hides some quite differing numbers country by country. Spanish budgets rose by 0.6% in 2023, compared to Rest of Europe’s 6.0% and the Netherlands 5.2%. In 2024, while Spain improves at 2.1%, Rest of Europe and Netherlands accelerate further at 7.3% and 8.0%, respectively.
• Banks across Europe are spending 48% of budget on “change the bank” initiatives, fractionally below the global average of 49%. Here the differences between countries is clear again, with Spain at 60% and the Netherlands at 37%.Smaller banks have higher budget allocations for growth than larger banks that are encumbered with a higher percentage of “run the bank” costs.
• Three drivers for investment stand out – compliance and regulation, speed and agility, and modernizing legacy platforms. These align with global trends. However, unlike the global trends, product innovation is only ranked as a top three driver by the smaller banks. This is not to say that it isn’t a priority, but that budgets continue to be driven by external factors like regulation and compliance.
• Process automation was ranked by 36% of banks as their highest technology priority, ranked first both as highest priority and cumulative priority. This is less that it isn’t a high priority, but that European banks saw everything as a priority. Of the 17 choices in total, European banks selected 16 of them, and banks chose 15 as their first priority.
• In terms of business and product priorities, digital channels (which includes online, mobile, and API), followed by embedded finance, are the clear winners at 47% and 45%, respectively.