No matter whom in the financial services industry you ask-CEO, president, CIO or business unit head-technology investment is one of those subjects that gets more intriguing, and complex, with every conversation, never mind each passing quarter.

As the financial services business barrels along at what sometimes seems like warp speed, the profound impact of technology on the industry as a whole has manifested itself in many ways across the institution's front, middle and back offices. The financial services industry has seen that with information technology (IT) comes opportunity to increase market share, acquire new customers, enter new markets and grow revenue streams. But there is a flip side: The seductive promise of new opportunity that technology brings to the industry can also lure players into an intricate web of IT spending that doesn't profit the institution; rather, poorly planned IT projects can become money pits.

It's no surprise then that what's of greatest interest to virtually all industry players is who's spending what on IT across the banking, brokerage and insurance sectors and in what strategic areas. This kind of proprietary information is hard to come by and something most senior financial executives find invaluable as they benchmark their own IT investment plans against those of industry leaders.

Look no further. The Strategic Technology Investment Report 1998, a joint venture of American Banker-Meridien Research, is a comprehensive accounting of what major U.S. financial institutions are spending on IT, in what areas the "strategic" spending is occurring (risk management, self- service delivery platforms, customer management, and Internet/intranet, for example) and the level of IT spending that's anticipated in 1998 and as the industry approaches 2000. The report will published by American Banker- Meridien Research, Inc. as a book this month; excerpts from the report appear in this special 13th issue of Management Strategies.

While much of the industry pays tremendous lip service to smart investment in IT, too often it's just not the case-with costly results. Even more, there are often misperceptions about the relationship between IT spending and profitability. According to report findings, the "correlation between the level of IT spending (measured as a percentage of overall expenses) and return on assets is extremely tenuous at best." So while strategic investment in technology is crucial to an institution's survival and overall prosperity in the future, size of investment is less relevant than "how technology dollars are spent, which technologies are invested in, how well a firm executes its technology plans and how well those plans are coordinated with the institution's business strategy."

Planning and investing wisely in technology will let you focus on what your financial services business is all about: making money. The Strategic Technology Investment Report 1998 can help you do just that. To order a copy of the book, call American Banker at 800-367-3989.

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