Banking and investment firms will spend around $652 billion on IT services in 2023, predicts market researcher Gartner.

According to a new report, IT spend in the sector will increase by eight per cent from 2022 with software set for the largest jump of about 13 per cent in 2023.

A survey of technology executives showed that more than half plan to increase investment in cloud and reduce spending in their own data centres, which is expected to fall from 13 per cent in 2022 to around 6 per cent.

Debbie Buckland, director analyst at Gartner said that the economic climate has contributed to this change in technology spending in the financial sector. She said: “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 favour of buying solutions that generate value from investments more rapidly.”

IT services will be the largest spending category driven by the increased use of consulting services and infrastructure as a service (IaaS) Gartner said the sector will reach almost $270 billion in 2023, an increase of around nine percent from 2022.

Buckland added: “Economic uncertainty is leading organizations to break down long-term contracts into multiple shorter projects. They’re also reluctant to sign new contracts, commit to long-term initiatives or take on new technology partners, which is driving an increase in the use of IT consulting services.”

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