Banks Are Ramping Up Digitalization Project Spending
As revenue growth slows and digital challengers grab market share, banks are ramping up digitalization project spending in a bid to secure the future.
SIGNS OF A SLOWDOWN
|Global banking average annual revenue growth rate, 2010-2015||Global revenue growth rate, 2016||Overall decrease in banks’ profit margins, 2014-2016|
US$90 billion Amount banks in developed markets could lose in profit by 2020 due to low economic growth and increased digital disruption
With digitalization projects multiplying across the sector, banks must spend a lot to successfully transform.
US$20.2 billion Amount U.S. banks planned to spend on hardware, software, services and IT staff to develop and implement digital transformation initiatives in 2017
|of U.S. banks’ IT budgets were devoted to digital transformation initiatives in 2017.|
|of financial service companies undertook digital transformation initiatives in 2017.|
>40% of their budgets will be spent on digital transformation initiatives by 2020.
Yet targeted project benefits aren't guaranteed.
of financial services IT leaders see a disparity between what executives expect from a digital initiative and what will be achieved.
say there are currently not enough resources to achieve digital initiatives.
Sources: U.S. Banking Digital Transformation Spending Forecast, 2017-2020, IDC, 2017; Remaking the Bank for an Ecosystem World, McKinsey, 2017; A Brave New World for Global Banking: McKinsey Global Banking Annual Review 2016, McKinsey, 2016; 2017 Connectivity Benchmark Report, MuleSoft, 2017