The Morning Download: Banks Failing to Get Bang for IT Bucks - Wall Street Journal (blog)

The Morning Download: Banks Failing to Get Bang for IT Bucks - Wall Street Journal (blog)

Good morning. U.S. banks will spend more than $40 billion on IT this year, by some estimates. But according to Gartner analyst David Furlonger, too much of that IT spending goes toward maintaining outdated IT platforms. “This problem is magnified at the larger firms because they built those structures based on profit margins that were far better than what they are today,” Mr. Furlonger told CIO Journal. “Now they have to feed and water those platforms and processes.” That complexity was exacerbated through consolidation that occurred in the sector over the previous decade. According to the Journal, the six largest U.S. banks have more than 22,000 subsidiaries combined. Bank technology leaders are still working through those issues, but say they’ve been able to get their houses in order, enabling them to spend more on analytics and other strategic technologies, while keeping overall IT spending flat. Guy Chiarello, CIO of J.P. Morgan, tol d CIO Journal earlier this year that “net [technology] spend is flat from 2007… And that’s with more investment in innovation.”

Source Article from http://blogs.wsj.com/cio/2013/04/12/the-morning-download-banks-failing-to-get-bang-for-it-bucks/