27 Jun 2017
U.S. Retail Banks to Spend $20.2 billion to Support Digital Transformation Initiatives in 2017, According to IDC Financial Insights
New market forecast finds largest institutions allocate more than 40% of IT budget to digital transformation
FRAMINGHAM, Mass., June 27, 2017 – I DC Financial Insights today announced the availability of a new IDC Market Forecast report to provide end users with an updated look at digital transformation (DX) spending in U.S. banking. According to the new study, U.S. Banking Digital Transformation Spending Forecast, 2017-2020 (Doc #US42429417), retail banks (including thrift banks and credit unions) in the United States will spend $20.2 billion on hardware, software, services, and internal IT staff to develop and implement DX initiatives in 2017, growing at an average compound annual growth rate (CAGR) of 22.5% into 2020. This compares with growth of 4.8% in overall IT spend for U.S. banks. The forecast highlights spending by US–based banks across four categories of DX technology: hardware, software, IT services, and internal IT, as defined in IDC Financial Insights Worldwide Banking Taxonomy, 2017 (IDC #US42517617).
- ClicktoTweet : New IDC Report Forecasts U.S. Banking Digital Spending for 2017-2020 http://bit.ly/2s0Y9wY
According to Jerry Silva, research director, Global Retail Banking, IDC Financial Insights, "There are very few banks in the United States that aren't investing in transformational technologies, and fewer still that haven't at least developed a digital transformation strategy. And the largest institutions are allocating more than 40% of their IT budgets to digital transformation."
As banks in the United States endeavor to stay relevant in the financial lives of their consumer, business, and corporate customers, the institutions are dedicating more and more of their scarce resources to initiatives that promise to transform the business. In addition:
- 25.7% of the banks' IT budget will be spent on DX initiatives in 2017, growing to over 40% by 2020
- 82% of the DX spend is taking place in the middle and back office and in commercial and payments areas where investments in infrastructure, security, risk management, and data initiatives are higher than in front-office, customer-facing spending
- Because of the pressures coming from regulatory compliance, increased need to manage risk, and constant attacks on the banks' security systems, discretionary spending for important line-of-business projects that can accomplish DX continues to be at a premium
IDC defines DX as the continuous process by which enterprises adapt to or drive disruptive changes in their customers and markets (external ecosystem) by leveraging digital competencies to innovate new business models, products, and services that seamlessly blend digital, physical, business, and customer experiences while improving operational efficiencies and organizational performance.
For additional information about this report or to arrange a one-on-one briefing with Jerry Silva or Karen Massey, please contact Sarah Murray at 781-378-2674 or email@example.com. Reports are available to qualified members of the media. For information on purchasing reports, contact firstname.lastname@example.org ; reporters should email email@example.com.
About IDC Financial Insights
IDC Financial Insights assists financial service businesses and IT leaders, as well as the suppliers who serve them, in making more effective technology decisions by providing accurate, timely, and insightful fact-based research and consulting services. Staffed by senior analysts with decades of industry experience, our global research analyzes and advises on business and technology issues facing the banking, insurance, and securities and investments industries. International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology market. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world's leading media, data and marketing services company that activates and engages the most influential technology buyers. For more information, please visit www.idc-fi.com, email firstname.lastname@example.org, or call 508-620-5533. Visit the IDC Financial Insights Community at http://idc-insights-community.com/financial.