We found 35% of survey respondents expected their overall tech budgets to stay flat in 2022, while a surprising 54% expected their tech budgets to increase. Less than two percent of the respondents expected their budgets to contract by more than 10%. All of those more-cautious buyers were at companies spending less than $100 million annually on technology.
Eight in 10 U.S. bank board members and executives said that their banks had increased their technology budgets in 2022, with cybersecurity being a key area of investment, according to a new report by Bank Director Magazine. The report said participating banks had raised their tech budgets by a median 11% over the past year, with 45% of respondents saying their institutions rely on outdated technology. A total of 138 board members and bank executives participated in the survey.
A part of this effort includes an annual technology survey that examines how financial institutions are thinking about technology strategies, budgets, investments, and more. This year, Bank Director surveyed 122 independent directors, chief executives, chief operating officers, and senior technology executives of U.S. banks below $100 billion in assets.
The most consuming areas for strategic technology enhancements are digital deposit account opening, digital loan applications, and data analytics. However, staffing is listed as the second top priority for banks when looking at how to invest their technology budgets.
According to the survey, 80% of respondents reported an increase in tech spending this year to help address the Covid-19 pandemic. And looking ahead, 87% said they expect their organizations to increase their technology budgets in 2021, spending more on items such as resident monitoring, contact tracing, telehealth and virtual tours.
Long-term sales prospects are similarly positive for enterprise tech startups in those fields. The vast majority of survey respondents report plans to increase budgets in the next five years for the following:
Reductions in enterprisewide nonessential spending are on the horizon, and many companies will reevaluate vendor contracts, decommission outdated and redundant infrastructure, delay tech purchases and cut back on hiring in order to reduce budgets, according to the report.
While there may be a divide between how large and small firms are using their technology budgets, advisors across the board recognize how important technology is for the future of their firms and the wealth management industry.
In 2022, community banks grew their technology budgets by an average of 11%, bringing the median yearly budget up to a whopping $1 million. The recent Bank Director survey found that most of those new dollars were earmarked for customer experience improvements, specifically on measures institutions felt would have the greatest impact on customer satisfaction and competitiveness of the bank. One area where FIs need more investment, though, is in CX technology at the branch.
Although technology spend has risen dramatically during the pandemic, the survey found that technology budgets will be under more strain over the year ahead. Prior to COVID-19, over half (51%) of IT leaders expected a budget rise in the next 12 months, but during the pandemic this number declined to 43%.
Analysis by Harvey Nash and KPMG of a range of publicly available global data on IT/tech spending shows that annual rises in spend have tracked at 5% and below for more than a decade, reaching a peak of 5% growth in 2018. For instance, Forrester research, published 3rd February 2020, found that the growth in global spending on tech goods and services dropped from a peak of 5% in 2018 to 3.9% in 2019. ( -forrester-forecast-shows-global-tech-market-growth-will-slip-to-3-in-2020-and-2021/). As global IT leaders report a median additional spend of 5% of their IT budgets on technology to deal with the COVID-19 crisis, this level of spend, in just three months, is more than their annual budget rise.
With these industry insights in mind, marketing technology budgets will likely continue to strengthen throughout 2021 -- customers are already increasing their expectations for online content. For those that choose to follow the trend, it could mean a new wave of superior online content in response to new digital media expectations.
2020 certainly brought a year of uncertainty, marketing budgets included. Early in the pandemic, it was clear that retail brands were going to struggle longer term as compared to B2B and technology companies. But everything is cyclical, meaning it may start at retail and slowly affect the entire supply chain over time.
Overall digital marketing budgets declined by about four and a half points from 2020 to 2021. Media, manufacturing, and tech products took the most significant hit, with some marketing budgets dropping over 50% from last year.
These investments for workforce development are obviously part of the larger technology budget, which appears to be stabilizing at adequate levels for most companies. As expected, the perception of technology budgets skews toward the insufficient end of the scale. Overall, though, the technology budget is healthy for most organizations, and it is moving in the right direction; 43% of companies believe that their technology budget in 2023 will be higher than it was in 2022.
As technology becomes a greater part of business operations, budgets have been steadily growing. The 2017 survey found that enterprise organizations projected a 4.8% increase in 2017 IT budgets, and SMBs predicted a slightly larger increase of 8% from 2016.
As part of that drop in total marketing budgets, investments in marketing technology dropped three percent year-on-year to 26% of budgets in 2019. Paid media spending actually increased from three percent to 26% this year.
For the last eight years, we have partnered with the International Legal Technology Association (ILTA) to produce the annual ILTA/InsideLegal Technology Purchasing Survey (Survey), examining the technology purchasing trends, budgets and purchasing influences of ILTA law firm members. Thanks to the law firms' diligence, the survey yields much valuable information. However, we can't possibly fit it all into the final 16 page report so we've decided to provide additional views and analysis of the data broken down by firm size.
Martech is more important than ever, and despite a more challenging economic situation in 2022, martech budgets are continuing to grow. The global market for Martech and Salestech is estimated to be worth $508.9bn.As our latest State of Martech report finds organisations face a number of challenges around marketing technology. The biggest one is finding the skills and talent needed to drive martech initiatives.
Other training expenditures decreased this year to $15.5 billion from $29.4 billion in 2020. Such expenditures can include travel, training facilities, in-house training development, and equipment. On average, organizations spent 11 percent of their budget or $337,190 (down from $708,255 last year) on learning tools and technologies. Large services organizations had the largest budgets for learning tools ($2.3 million). Midsize education organizations had the largest tool budget in their size range ($387,000).
Respondents are planning to apply IT budget cuts strategically. The pandemic has demanded additional IT spending to move education and work online, and that will need to continue in the fall. Respondents' plans for their IT budgets are focused on a combination of cuts to reduce spending on less essential services (e.g., auxiliary systems and, at this time, classroom technology) and increases to support efficiencies (e.g., cloud services) and continued online operations (e.g., online learning systems) (see figure 4).
Everything is unsettled, and no one can predict what the fall will bring. Higher education institutions are preparing for grim times. The choices that leaders make will shape their institutions and higher education for many years, perhaps permanently. Our early indicators of potential changes to institutional IT budgets suggest that while some institutions intend to use the pandemic to vault ahead and accelerate transformation, others may have a reactive approach that reverts to old choices and diminishes the value of information technology at a time when it could do so much.
Budget: Compliance departments appear to be receiving support in their technology journeys from the broader organization. Nearly half of respondents (49 percent) expect their overall ethics and compliance department budgets to increase year-over-year, while the vast majority of respondents (more than 75 percent) expect their technology budgets specifically to increase. 076b4e4f54