Tech Spending in 2023

Despite economic uncertainty heading into the new year, financial services executives appear committed to technology investment. Specifically, 70% of respondents to a recent Arizent survey said they expect to increase spending on technology in 2023. While this is down from 85% last year, it nonetheless represents very a strong showing in the face of continued turbulence miring the wider backdrop. Moreover, according to the report, among those who plan to increase their tech spending this year, more than three-quarters expect to up that investment by at least 10%.

This is incredibly promising news for the industry, as it suggests that executives understand the long-term imperative to evolve and are remaining steadfast in their efforts. Such commitment likely comes down to the fact that, no matter what the current economic climate is, the pressure to step it up as technology moves the bar higher across financial services is unlikely to abate. In evidence of this, the report also revealed that half of respondents believe the changing competitive environment will be one of the most impactful trends for the next three years. The goal now will be to use those investments strategically to extract as much value as possible.

When it comes to spending priorities, data and analytics came out on top in Arizent’s survey, which is in line with
our prior coverage. However, in the context of spending decisions in this environment, this makes outsized sense, as a good data strategy can help drive greater efficiencies while improving products and services at once. As we’ve discussed before, it’s a huge task to integrate systems in a way that can support a 360-degree view of the customer, especially legacy systems. Hard, though, does not mean impossible. And, in approaching such work, it’s important to remember that doing it correctly and thoroughly is worth it. While putting an emphasis on data and analytics is a wise choice when it comes to return on investment (ROI), having a well-defined strategy and talent to support that strategy will be key.