Financial services is the most technology-intensive industry in the United States today. The industry, including banks, brokerages and insurance firms, will spend nearly $50 billion on information technology (IT) in 1997 alone. Yet despite this level of investment, there is little understanding of how money is spent and even less agreement about the impact of this spending on the industry's profitability. It is universally agreed that without IT this industry would not survive. However, it is unclear how IT investments affect the ability of an institution to survive and prosper in an increasingly competitive marketplace. It is essential that financial services understand how IT affects both the industry as a whole and individual institutions in order to maximize the return on investments. Types of it investment

Our research has concluded that it is not the amount of IT spending that influences the success of the institution, but rather it is the type of spending. This further underlines the need to understand what types of IT investments are high impact, and which are simply undermining profitability by increasing capital expenditures. If institutions do not take steps to allocate IT investments to high impact, strategically advantageous efforts, they are likely to end up with nothing to show for their investments.

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