Infosys Bank Tech Index – Volume 4: Banks Intend to Increase AI Budgets by Nearly 8 Percent
Infosys released volume 4 of its Bank Tech Index, analyzing data from nearly 400 of the largest banks by assets in Asia Pacific, Europe, Latin America, the Middle East and Africa, and North America. Developed by the Infosys Knowledge Institute, the research and thought leadership arm of Infosys, the report gathers insights on technology spending, staffing, and performance from a panel of leading global banks.
Infosys found AI continues to be the fastest growing area of technology spend for banks globally. Banks continue to believe that AI will boost productivity, reduce costs, and drive innovation. AI and cybersecurity continue to dominate banks’ budgets, but the growth in spending has subsided in the last quarter. While AI spending has decreased in the short-term, banks plan to increase AI budgets through December 2024.
Key findings include:
- AI spend cooled but is expected to rebound – AI accounts for 29 percent of banks’ allocated technology budgets in Q3 of 2024 and is likely to increase in share through Q4. AI spending by banks is forecasted to grow by 7.7 percent between Q3 and Q4 of 2024, the fastest among all technologies, including cybersecurity.
- Focus on regulation rises as cost reduction falls – The strategic importance of regulatory compliance increased by four points since Q2 of 2024, while cost reduction fell by three points. Banks are expected to increase tech budgets by a median of three percent, with regulatory budgets expected to grow faster at 3.8 percent.
- Technology recruitment slowdown begins to flatten – In volume 3 of the index, expected technology recruitment fell by 41 percent. While still falling, recruitment only declined by 17 percent in volume 4, signaling that the declining technology recruitment trend could be flattening. The fall in recruitment was primarily driven by declines in expected machine learning and cybersecurity recruitment.
- Product and service skills become more difficult to recruit – Talent across service design, software engineering, and product management skills are increasingly difficult to source while AI skills become relatively easier to recruit. Banks may, therefore, be switching focus from building AI capabilities to developing new products with those capabilities.
To read the full report, please visit here.
About the Infosys Bank Tech Index
The quarterly report indexes quantitative data on technology priorities, technology spending, talent trends, and skills among 396 major banks in the Asia Pacific, Europe, Middle East, Latin America, and North America regions with assets over $10 billion. It provides decision makers with dynamic insights and evolving patterns across the technology landscape. The report categorizes banks according to their financial performance (calculated as revenue divided by total net assets). It also compares banking trends in advanced economies and emerging or developing economies.
