According to Gartner’s research, banking and investment organisations are predicted to spend nearly $270bn (£212bn~) on IT services alone. This acts as a reminder of the important role IT service providers have in supporting such organisations to navigate opportunities and challenges alike.

Meanwhile, the second largest spending category for banking and investment services organisations is software. This area is set to see the largest growth out of all IT categories in 2023 — 13.5% compared to 2022 — totalling around $174bn (£136bn~).

Then, coming in as the third largest spending category is telecom services at just under $80bn (£62bn~). This is followed by internal services at $55bn (£43bn~), then devices at $37bn (£29bn~), and lastly data centre systems at $36bn (£28bn~).

Interestingly, when it comes to data centre systems, Gartner’s 2023 CIO and Technology Executive Survey discovered that more than half of banking and investment services CIOs plan to increase investments in cloud, while reducing IT spending in their own data centres.

This is reflected in Gartner’s recent findings: in 2022, banking and investment services organisations spent around $34bn (£26bn~) on data centre systems, which was a growth of 13.2% compared to 2021. However, in 2023, spending on data centre systems is suggested to be $36bn (£28bn~), meaning that growth is set to slow.

Another fascinating insight concerns the prediction for internal services spend, which at $55bn (£43bn~) is an increase of 4.2% in 2023 compared to 2022. Gartner points to the global talent shortage as the cause, with the increase in spend in this area helping to support the increased costs of hiring and retaining talent.

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According to Gartner’s findings, there’s only one area where a fall in spending is forecasted, and that’s in devices. This continues the trend that was seen in 2022, where device spending was $37.9bn (£29.7bn~), marking a -9.9% change compared to 2021. In 2023, the spend is set to be $37.1bn (£29.1bn~), representing a change of -2.1%.

Speaking on Gartner’s new forecast and the findings which underpin it, Debbie Buckland, Director Analyst at Gartner, said: “Current economic headwinds have changed the context for technology investments in banking and investment services this year.

“Rather than cutting IT budgets, organizations are spending more on the types of technologies that generate significantly higher business outcomes. Spending on software, for example, is shifting away from building it in-house, in favor of buying solutions that generate value from investments more rapidly.”