Project Management Institute

Survival Strategy

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

img img img
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

DIGITAL DEPOSITS

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

img of U.S. banks’ IT budgets were devoted to digital transformation initiatives in 2017.
img of financial service companies undertook digital transformation initiatives in 2017.

>40% of their budgets will be spent on digital transformation initiatives by 2020.

img

STICKING POINTS

Yet targeted project benefits aren't guaranteed.

img of financial services IT leaders see a disparity between what executives expect from a digital initiative and what will be achieved.

img 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

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

Advertisement

Advertisement

Related Content

  • PM Network

    Power to Change

    By Tayel, Jess Many organizations are undergoing (or will soon undergo) a business transformation program geared toward growth and creating a competitive advantage. When successful, these programs bring about a…

  • PM Network

    Serving Up Innovation

    By Fister Gale, Sarah McDonald's has a craving for change. Decades after it turned the restaurant industry upside down by scaling fast-food convenience, the organization is on a mission to transform the customer…

  • PM Network

    Beyond Mining

    By Ali, Ambreen In the cradle of copper, Chile is digging deeper and wider to reimagine its economy. Government leaders don't want mining to define the country's opportunities—and with good reason. A global…

  • PM Network

    Cashing Out

    By Ali, Ambreen Cash is no longer king. In 2018, for the first time ever, the number of global ATMs decreased. Around the world, countries and retailers are launching monetary projects to become entirely digital.…

  • PM Network

    Invested in Change

    By Fister Gale, Sarah As a pillar of the U.S. housing market, the Federal National Mortgage Association—or Fannie Mae— knows that owning a home is about more than having a place to live. It's also an opportunity to make…

Advertisement