A recent study by the global market research analysts Ovum suggests that economic confidence is returning to retail banks, which are poised to shift their priorities in 2013 away from slashing IT budgets in favour of expanding them to achieve revenue growth.
The firm estimates that IT spending amongst retail banks worldwide will grow by 3.4% this year to reach £75.3 billion; however, the overall figure masks significant regional differences. The UK’s banking sector, for example, is expected to invest substantially less than the average, expanding IT budgets by just 1.8%. North America will increase IT investment by 3.3%, while Asia is set to reach the top of the investment tree with an expected increase of 5.1%.
The findings are consistent with an earlier poll in the UK, which found that techies contracting in the IT skills market were considerably less confident in financial services as providers of job opportunities in 2013 than they had been in the previous two years.
The Ovum study suggests, however, that the cost-cutting approach that afflicted the sector in 2012, when it struggled with the fallout from the banking crisis and a double-dip recession, appears to be entering growth-orientated territory at last.
Growth amongst European retail banks is expected to be less vigorous than other major regions. Jaroslaw Knapik, a senior analyst at Ovum, believes that this is due to weaker demand and macroeconomic conditions, which are combining to slow investment growth.
Even so, Mr Knapik believes that when economic conditions become more stable, European banks will invest in a backlog of projects to refresh core banking systems.