米国の金融危機が米国リテールバンクのIT支出に与える影響 Part 2

A year ago, Kieran Hines, in his blog post looking at the outlook for retail bank IT spending in 2023, announced that expenditure was going ‘Back to the Future’. Following the shock of the pandemic, which drove a decline in spending in 2020, focus on driving innovation and revenue growth in the industry had driven a bounce back of IT spend growth in 2021 and 2022, with the predicted growth outlook for this year set to be strong at 5.2% .

How did this pan out in reality? For those of you who have seen the Back to the Future films, was Marty (the hero) able to maintain the time continuum, or did Future Biff (the villain) get in the way?

2023 US bank crisis did have an impact on IT spending

Well, it turned out that ‘Future Biff’ did make an impact. The key development that changed plans this year was the US banking crisis. This kicked off back in March, when deposit runs led to the collapse of a number of significantly sized banks. In terms of the crisis itself, banks that had a high proportion of customer deposits above the $250k insurance limit were most affected, however the underlying cause was a sharp growth of base interest rates that had drove concerns over asset and liability mismatches (while interest rate growth was a global trend, US banks were particularly troubled given their propensity for very long-term fixed lending).

What was the impact? This year’s Celent’s Technology Insight and Strategy Survey, which surveyed budget plans of over 1,000 institutions across the financial services sector following the crisis, looked at this year’s spending developments and new plans to find out. Leveraging this primary insight, we have just finalized our Celent Banking IT Spending Forecast Model 2023-2028 to quantify the impact (see our latest spending report for detailed findings).

Overall spending plans were affected, but this was largely localized to the US (and some European markets), and the main US tiers in question (particularly tier 2 and tier 3 banks). Given the importance of the US, at a global level this did reduce spending growth, with worldwide IT spend up 4.4% in 2023 rather than the 5.2% envisioned at start of the year. This was primarily driven by US growth of only 3.9% compared to a 5.1% predicted outlook. 2023 budgets by tier 2 ($100-$500bn assets) banks were revised mid-year to see a growth of 3.6%, with tier 3 banks ($50-$100bn assets) downgrading budgets to see just 1.6% growth. In contrast, spending by tier 1 US banks remained robust, realizing 4.8% growth, with spending by smaller banks also maintaining strong growth; with 6.0% growth expected for tier 5 US banks ($1-$20bn assets).

2024 spending is going back to the future

The outlook for 2024? Well, based on current expectations it looks like Marty will maintain the time continuum. While tier 2 and 3 US banks did adjust budget plans in 2023, most expect IT spending to bounce back in 2024. Celent therefore expects global IT spending to reach 5.0% growth in 2024, with medium term prospects even stronger - with 2025 spend expanding to 5.4%. This is being driven by the underlying need for digital transformation, with product innovation, legacy modernization, and cloud migration maintaining spend growth.

However, after this spend growth rates are expected to gradually fall. Interestingly, many banks surveyed said that they are now trying to control growth of, or even reduce, IT intensity (IT spend as a proportion of non-interest expenses). Cloud migration and application rationalization are seen as key enablers of this, and with many banks making significant IT investment as part of transformation programs in recent years there is now an expectation that banks need to produce business returns from this to payback investors. This will be countered to some degree by investment in new areas such as generative AI and advanced analytics as well as supporting new business model opportunities from open banking, Banking as a Service, and embedded finance. However, banks will be looking for efficiencies to fund innovation investment.

While forecasts can’t factor in ‘unknown unknowns’ and hopefully a ‘Future Biff’ doesn’t come back in 2024, both the underlying fundamentals for technology investment and bank executive intentions suggest IT spending is set to go 'Back to the Future' again.