New research from UBS points to the largest spenders on bank technology: JPMorgan and Bank of America.
Reports in Business Insider on Thursday (March 28) said UBS has published a report that breaks down U.S. banks' technology budgets and explores which institutions are spending the most on innovation, using transcripts from conference calls, internal bank data released by the institutions and data from FactSet to reach its conclusions.
JPMorgan landed at No. 1 with an $11.4 billion technology budget for the year ahead. That's a 5.6 percent increase from 2018 figures, with researchers finding nearly half of its technology budget last year was spent on disruptive technology to implement within the institution.
Bank of America has a $10 billion IT spending budget, with 30 percent used for its "technology initiative investment spend," reports said.
Coming in at No. 3 and No. 4 are Wells Fargo and Citigroup, at about $9 billion and $8 billion in technology budgets, respectively.
According to Business Insider, in addition to shedding light on the biggest banks' technology innovation goals, the information also points to a growing gap between the largest and smallest banks, and how much they can afford to invest in and develop new technologies. Smaller banks are falling behind, the report said, and putting regional institutions at a competitive disadvantage.
Earlier this week, Rebecca Skitt, group managing director at bank platform technology company 10x, said in an interview with PYMNTS that traditional banks' legacy IT infrastructures are "suffocating" and holding them back from bolstering their competitive edge. She emphasized the importance of taking a holistic, outside-in approach to digital transformation.
"Many [banks] are suffocated by out-of-date technology, glacier-pace product development, fragmented and siloed internal views of the business, and the high cost of maintaining their legacy technology,” she said. “This is all being done while managing capital requirements and compliance costs in a rapidly evolving digital landscape marked by increased competition.”