Global IT spend by banks continues to rise post-Covid

The post-Covid era has seen the global banking sector transform digitally to seamlessly extend banking services to its customers.

In line with this, the investment towards digital transformation has risen at a rapid pace.

The pandemic presented an opportunity for banks to digitally transform and make a majority, if not all, of their services available to their customers in the way they deemed convenient.

“During the Covid period, most banks already had some operations available on their net-banking platforms. But what we saw was that the scale of digital transformation has increased tremendously in this period,” said Ranga Reddy, the chief executive officer of Maveric Systems.

The Chennai-based company enables digital transformation in the retail banking sector across the globe.

It plans to expand its global business by setting up a near-shore centre in Poland and is in talks with some of the global banking institutions
including Bank of America and other leading local European banks to bring them on board.

The global information technology (IT) spending in devices and communication services saw a marginal year-on-year dip in 2020 at -1.5 per cent and -1.4 per cent respectively. However, the same has rebounded in 2021 after the global economy started recovering in the post-pandemic era, as per a report by Gartner, a technology research firm.

According to the report, the global IT spendings in data centre systems, enterprise software and IT services is forecasted to record YoY growth rates of 7.4 per cent, 13.2 per cent and 9.8 per cent respectively in 2021.

“The pandemic has changed the bank space tremendously with a lot of investment coming in digital transformation and accelerating digitisation of the banking sector by at least three years. At Maveric, we have been
seeing a very buoyant time ever since the pandemic came in. We grew by 28 per cent YoY last year and this year, too, we foresee a growth rate of about 32 per cent in terms of revenue,” said Reddy.

The median investment budgeted for technology by banks with varying asset sizes in 2021 rose to $1,695,620, up 84 per cent from $900,000 in 2020, according to the 2021 Technology Survey report by Bank Director, an information resource for banking and finance institutions.

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