Technology Spending at Banks Expected to Remain at Moderate Pace in 2006

William Mills Agency, the largest independent public relations firm serving the financial and transactional technology services sectors, announced the release of its annual “Bankers As Buyers” survey. The survey is a collection of research, observations and articles about what technology and services bankers will invest in during 2006. The free report can be downloaded at www.williammills.com/pdf/bab2006.pdf.

IT spending is expected to be down slightly from previous years, according to one source quoted in the survey. Financial Insights predicts that overall spending by financial institutions will shrink from a growth rate of 4.8 percent in 2004 and 4.6 percent in 2005 to only 4 percent in 2006, mainly because the number of banks, thrifts and credit unions are all shrinking.

The survey examines overall spending as well as individualized spending in the areas of fraud prevention, compliance, customer service, payment systems, and integration. It also offers a community bank perspective and several feature articles on trends in bank technology and spending over the coming year.

Jeanne Capachin, Research Director for Financial Insights, and one of the featured authors in the survey noted, “Banks will be spending in IT and infrastructure so that they can respond to customers more quickly.” Another featured author, Jimmy Sawyers, Director of Consulting for Reynolds, Bone & Griesbeck PLC reported, “We see an optimistic future for banking technology filled with innovation and improvement at all levels of banking. Managing the incredible regulatory burden remains a challenge, but bankers appear to be up to the task by applying technology where needed and reviewing old systems for much-needed upgrades and redesigns.”

Also in the report, Chris Gill, Senior Manager, Dove Consulting writes about the need for financial institutions to continue to build their branch-banking network to acquire new customers. According to Gill, “Branch locations are a key component of an institution’s brand image, and the location of a branch facility near one’s home or business is a key factor in selecting a bank – even for customers who are primarily self-service oriented and rarely visit a branch.”