The 12 top investment banks spent $34bn on technology in 2024
Sometimes, you have to spend money to save money. Banks are investing a lot of money into their technology teams to produce more efficient tools and reduce their overall cost base. At the biggest banks, billions are being injected.
A new report from Crisil Coalition Greenwhich today broke down spending within the corporate and investment banks (CIB) of the 12 largest banks in the world*. It found that $34bn was spent last year between them, an average of $2.8bn per bank. Some banks spend more than others; in its investor day presentation earlier this year, JPMorgan said it spent $8bn on technology in its CIB last year, almost half of its total technology spend.
Indeed, it's the US banks that seem to be spending the most by some margin. Since 2019, technology spending at US banks has risen 34%, compared to 20% at their European rivals. US banks also spend more on technology as a proportion of their total costs, 22%, compared to European banks (20.7%). Some initiatives are costly; Deutsche Bank is spending €130m ($152m) per year, 4% of the bank's annual budget, just on a partnership with Google Cloud.
What exactly is the money being spent on? The report said it's going towards front-office applications "such as execution management systems," middle-office reconciliation systems, back-office settlement systems, regulatory reporting and client portals, among other things. They're also "allocating more of their technology budget to AI," for large-scale data analysis, as well as developing AI tools to increase efficiency.
The technology staff working on all these applications are also a big expense; Our 2024/25 salary and bonus report found that technologists in finance earn an average compensation of $223k, and the biggest banks employ thousands of tech employees.
While tech spending has increased, the bulk of money spend by these CIBs is, of course, spent on the bankers. The 12 banks spent $76.3bn, $6.4bn each, on their front offices, "primarily for people (compensation and benefits)."
*BofA, BARC, BNPP, CITI, CS, DB, GS, HSBC, JPM, MS, SG, UBS
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