When it comes to information technology, Canada’s financial institutions are big spenders.
According to a report from research firm IDC Canada, which recently released a study on the state of information communications technology (ICT) expenditures, total ICT spending by Canadian banks on both internal and external costs exceeded $13 billion in 2013.
Just over half of ICT spending by Canadian banks was for development and professional services, 40.1 per cent was for computing services and 9.3 per cent was for communications.
“Canadian Bank ICT CIOs are under extreme pressure to reduce expenses while at the same time accommodate new services, acquisitions and inflation. Funds for initiatives that do not provide almost immediate benefits for business units within a bank are limited,” said Robert Smythe, IDC analyst for financial insights, in a statement. “This prevents most banking CIOs from making the strategic investments required for a bank to thrive in the new digital banking world.”
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Smythe added that the low hanging fruit of network and data centre consolidation has been harvested, and it will now require extreme ingenuity on the part of CIOs to achieve further cost reductions while supporting new product offerings and preparing to deliver immediate payment options across all product lines on a 24×7 basis.
“Clients will be demanding immediate gratification in their digital world and banks need to be able to meet these expectations without delay,” he said.