Introduction
EVP, Global Head, Financial Services
Welcome to our first edition of the Infosys Bank Tech Index. In this time of unprecedented change where interest rates have risen sharply, AI is emerging, and digital is maturing, we felt it important that we start indexing trends of technology spending and effectiveness in banking.
The study gathers quantitative data from 204 of the largest banks by assets in Asia Pacific, Europe, and North America.
This group of banks represent 64% of banking assets for banks with over $10 billion in assets.
This will be a quarterly programme that gathers insights on technology spending, staffing and performance from a panel of leading banks.
Over time this Index will provide the market with insights into evolving trends and interrelated dynamics of technology investments by banks.
The findings from this index will help executives understand the following:
How senior executives decide to spend their budgets across different technology areas.
The effectiveness of technology spending.
The evolving technology talent demand within banks.
We will continue to track these trends in the coming quarters. If you have any questions or if you would like to discuss these trends, please reach out to us.
Technology strategic priorities - The survey found that banks from North America and Europe focused on reducing costs, with North American banks also prioritizing business model transformation. However, banks in APAC were focused on driving business growth and complying with regulations. When comparing banks by their asset turnover ratio, we found the highest performing banks were more focused on business growth, while lower performing banks were focused on cost reduction and transforming their business model.
Technology spending - Total technology spend by our surveyed banks was $32 billion in the most recent reported quarter and is expected to rise by 9.7% quarter on quarter. CapEx, which accounts for two-thirds of total technology spend is expected to rise 9.5% quarter on quarter. OpEx is expected to increase 9.9% quarter on quarter. Bank in APAC spent twice as much on CapEx versus their peers in other regions. European and North American banks spent more than four times as much on OpEx compared to APAC. Banks are allocating the most of their budget to cybersecurity, open banking and cloud. Most banks in our sample are expected to increase spending on these technologies. Although APAC is the only region where Banking-as-a-Service is a focus.
Technology talent - Banks are expected to increase recruitment of full-time technology staff by 4.2% quarter on quarter. Banks in APAC are expected to increase hiring the fastest by 8.0%. Europe will increase hiring the slowest by 2.9%.
Over half the banks in our survey are expected to increase recruitment of full-time technology staff by between 5% and 10% in the next quarter. Banks found AI skills by far the most difficult skill to acquire in the most recent reported quarter. This trend is most prominent in APAC.
Technology project success - Nearly 70% of banks indicate that less than 25% of technology projects are on-track. Nearly two thirds of European banks have tech projects that are 25% on track.
