While Gartner's forecast that Europe will shed a third of its banks over the next two years sounds onerous, the firm's dire prognostication for the continent is shared by other pundits, though the specifics of the severity vary.

"Europe is by far the least optimistic for the coming years [in terms of bank IT spend]," says Gareth Lodge, a London-based senior analyst for Celent.

Celent's pending IT spending outlook is expected to predict a compound annual growth rate of 0.4 percent for European bank IT spending, which is far less than other regions and below Europe's 2 percent inflation rate. "While there is an increase, it's marginal …The picture varies dramatically by country, ownership and size, but with the theme that regulation and regulatory requirements are driving much, if not most of the spending," Lodge says.

Lodge would not comment specifically on the scope of Gartner's bank failure prediction for Europe, but said, "I believe we will see a number of banks fail, in the hundreds I suspect, across Europe."

Fewer banks means less customers for bank tech vendors, and a bearish disposition on innovation for the banks that remain. Lodge says the final number of bank failures will be determined by the role regulators may or may not play in taking an active role in shoring up banks via rescue packages — if the regulators are even able to do so given their own economic and political realities.

"Can [the regulators] afford to stand back? Can they afford to step in? Who decides? The latter refers to the inter-country support. My own feeling is that Germany is so tied to Italy right now, for example, that the prospect of the German regulator having to bail out an Italian bank, while unlikely, is considerably more possible than three months ago. Who knows what the next three months will bring?" Ovum also weighed in with IT predictions for 2012 on Friday. Unlike Gartner, Ovum's predictions are retail banking-specific. Ovum says global spending on retail banking technology will increase 3.2 percent to $135 billion.

The research firm says the Asia Pacific region will grow the fastest, hitting $10.2 billion by yearend, or 8.3 percent growth. Like Gartner and Celent, Ovum is predicting trouble in Europe stemming from the debt crisis. Ovum says Western Europe will have the lowest growth of all regions, increasing 1.9 percent to $44 billion. In a statement Ovum attributed the slow growth to the debt crisis, saying "growth in retail banking technology will be slower than in other regions." Jaroslaw Knapik, a senior analyst at Ovum, says there's not a strong correlation between the European debt crisis and bank IT spending in North America or the Asia Pacific region.

Like many other analysts, Ovum also says regulation will place a heavy burden on IT spending. Ovum says compliance will drive global spending on data management, business process management, business intelligence and analytics, with North American banks spending the most on compliance in the next year, at $2.2 billion. Ovum also says regulatory demands and the need to adopt new business models to respond to tighter margins and new products will spark investments in core banking upgrades — with spending on core banking technology increasing 2.5 percent to reach $19 billion by yearend.

Enrico Camerinelli, a Milan-based senior analyst at Aite, says the increased use of cloud structures at European banks will reduce IT costs.

The announcements of IT job cuts at Barclays and RBS is another sign of pending IT retrenchment. “IT is one of the low hanging fruits in a bank in terms of cutting costs,” Camerinelli says.