HFS Pulse—The 2024 outlook for banking and financial services

HFS’ latest installment of Pulse data is here! Our Pulse series is designed to provide recurring state-of-the-market updates on IT and services trends and investments to help enterprises and providers make informed decisions. Here is our outlook for banking and financial services. 2024 will be the year of AI-led technology arbitrage with a lumpy spending rebound.

• IT spending shows a welcome rebound across industries, but expect shorter contract lengths, heightened expectations for ROI, and major transformation initiatives chunked up into component parts. And IT no longer writes the checks, so ensure targeted offerings for the C-suite and line-of-business leaders
• HFS research shows 2024 will bring modest growth in labor-centric IT and business process services spending. AI-led technology spending is emerging as the growth engine of 2024 and is expected to drive significant investment. This is the rise of technology arbitrage. It will force a new S-curve of AI-driven value creation. Service providers have an opportunity to help drive AI maturity in 2024 and beyond.
• Expect a keen, continued focus on bottom-line impact doing more with less. AI and data initiatives lead emerging tech investments. IT services favors QA and microservices, with no silver bullet for growth. BPO spend remains commoditized and cost-focused, with some growing focus on operating model transformation.

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