US BANKING TECH SPEND FORECAST: What’s driving IT spend growth in the US, how it will be impacted by COVID-19, and what the new normal could look like

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The following is a preview of one Banking report, The US Banking Tech Spend Forecast. You can purchase this report here.

The COVID-19 pandemic has dramatically reshaped the global economic landscape in a matter of months — and US banks’ IT budgets haven’t been spared. The US, home to many of the world’s biggest banks, is also currently home to the among the highest case numbers and infection rates globally, and its economy shrank by 4.8% in Q1 due to the pandemic. This turmoil is having a direct effect on the US banking industry’s digitization plans, and in this report we explore the extent of that impact.

This report is based on eMarketer’s US Banking IT/Technology Expenses forecast, compiled in May 2020. In it, we focus on nine of the largest consumer-facing US banks by asset size as of Q1 2020, and how their spending on IT/tech is being affected by the pandemic both in the shorter term and the longer term. In this report, we divide the pandemic’s course into three expected phases: Lockdown (early 2020-late 2021); Partial Reopening (late 2021-early 2022); and The New Normal (early 2022-2024 and beyond). In the first half of the report, we give an overview of what each phase will look like and how it will affect US banks as a whole; while in the second half of the report, we look at how each of these nine banks could be affected individually by the pandemic. 

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In the US Banking Tech Spend Forecast report, Insider Intelligence explores underlying factors we expect to impact on US banks’ IT/tech spending through the entire forecast period, including cybersecurity spending, IT infrastructure maintenance, and economic slowdown; factors specific to each expected phase of the pandemic; and finally factors unique to each of the nine banks included in this forecast. Together, these factors give an overview of how one of the largest banking industries in the world will ride out the biggest economic crisis since 2008. 

The companies mentioned in this report include: Bank of America, Citibank, JPMorgan Chase, KeyBank, PNC, Regions Bank, Truist, US Bank, and Wells Fargo. 

Here are some of the key takeaways from the report:

In the first phase of the pandemic, we expect US banks’ IT/tech expenses to dip before reaccelerating. 
In the second phase of the pandemic, we expect banks’ expenses to continue on an upward trajectory, albeit a slower one. The YoY growth of banks’ tech and IT spend will be essentially flat.
In the third phase of the pandemic, we expect the coronavirus itself to be eradicated, leaving behind its social and economic aftermath — i.e., the new normal. During this period, banks’ IT/tech expenses will increase at a slower pace than in previous years.
Truist’s IT/tech spend will increase most during the forecast period of 2020 to 2024, at a compound annual growth rate (CAGR) of 15.42%. KeyBank will have the lowest CAGR at …read more

Source:: Businessinsider – Finance

      

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