Technology spending

Banks are spending more on tech, even as cybersecurity has the highest proportion in the budget

Total technology spending by category

Total technology spending across our sample is $32 billion and is expected to grow by 10% in the next quarter

Strong growth in technology spend - Total technology spend by banks in our survey is nearly $32 billion in the most recent reported quarter. This is expected to grow by 10% to $35 billion in the next quarter.

Larger banks skew average - The average technology spend for the reported quarter is $156 million. Yet the median technology spend is nearly $28 million. This illustrates the significant influence the largest banks have on technology spend.

Strong CapEx and OpEx growth - CapEx is expected to grow 9.5% and account for two-thirds of total technology spend in the next quarter. OpEx is expected to grow by 9.9% next quarter.

Technology spending by type

CapEx accounts for two-thirds of total technology spend and is expected to rise 9.5% quarter on quarter

Regulatory compliance accounts for 40% of CapEx - This is followed by IT Ops at 36.5% and new projects with 23.6%.

CapEx growth led by IT Ops - CapEx IT operations spending will contribute $800 million (up 9.9%), followed by regulatory with $750 million (up 8.1%) and new projects with $650 million (up 10.4%) in the next quarter.

IT Ops accounts for 41% of OpEx - This is followed by new projects and regulatory compliance at 30% and 29% respectively.

OpEx growth led by new projects - New projects will grow by $440 million (12.1%), followed by IT operations with $477 million (8.4%), and regulatory with $300 million (9%) to OpEx growth in the next quarter.

Technology spending by region

APAC banks spend the most on CapEx, while banks in Europe and North America spend much more on OpEx

APAC spent twice as much on CapEx versus peers - This difference is seen across all types of technology spending.

Europe and North America each spent nearly seven times more on OpEx compared to APAC - APAC spent 10 times less on new project operations than peers.

Technology spending by performance

Low performing banks are spending more but it may not be the full story

Lowest performing banks spend the most on CapEx - Banks with an asset turnover ratio less than 2.5% (lower performance) spend significantly more on capital expenditures.

Highest performing banks spend the least on OpEx - Banks with an asset turnover ratio more than 4.5% (higher performance) spend the least on operational expenditures.

Technology spending by size

Technology spending is dominated by the largest banks

Largest banks dominate spending - The largest banks spent more in every area with CapEx regulatory spending representing the largest difference.

Allocation of technology budget by region

Cybersecurity is and will continue to be a key spend across regions

North America, not APAC, bets on open banking - North American banks allocated 20% of their budgets to open banking while APAC banks allocated the least at 15%. This trend is expected to continue in the next quarter.APAC backs banking as a service platform (BaaS) - APAC banks allocated 19% of their budgets to BaaS compared to 13% or less by banks in North America and Europe.Cybersecurity a clear focus - Cybersecurity received the most budget across all regions. Over 95% of respondents indicated they would increase spending in the next quarter.