Spending on enterprise software is also expected to increase significantly next year. Spending is projected to grow by 11.5 percent next year compared to 2021, driven by infrastructure software spending.

John-David Lovelock, research vice president at Gartner told the media, “Enterprises will increasingly build new technologies and software, rather than buy and implement them, leading to overall slower spending levels in 2022 compared to 2021.”

“However, digital tech initiatives remain a top strategic business priority for companies as they continue to reinvent the future of work, focusing spending on making their infrastructure bulletproof and accommodating increasingly complex hybrid work for employees going into 2022.”

The Middle East and North Africa (MENA) region is likely to spend $171 billion in IT this year, Gartner revealed earlier this year. This is an increase of 4.5 percent year-on-year. Businesses in the region are likely to spend $7.6 billion more in 2021, compared to last year.

The report, which was released in April, also revealed that spending on IT services will grow by 8.7 percent to $13 million in 2021.

Similarly, spending on tech devices will rise by 8 percent to $27 million during the period. Global IT spending is likely to reach $4.1 trillion in 2021.

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John-David Lovelock, research vice president at Gartner told the media, “As the situation in the region improves and businesses understand the true value of a resilient digital ecosystem, IT spending will return to a pre-pandemic growth rate. In the first quarter of 2021, projects such as ‘remote work visas’, ‘Smart Dubai 2021’ and other economic policy regulations were launched. These are expected to boost technology investments in the region.”

The report published by Gartner also revealed that spending on IT services will grow by 8.7 percent to $13 million in 2021. Similarly, spending on tech devices will rise by 8 percent to $27 million during the period.

Global IT spending is likely to reach $4.1 trillion in 2021, which is an increase of 8.4 percent year-on-year, according to Gartner.

Lovelock added, “IT no longer just supports corporate operations as it traditionally has, but is fully participating in business value delivery. Not only does this shift IT from a back-office role to the front of business, but it also changes the source of funding from an overhead expense that is maintained, monitored and sometimes cut, to the thing that drives revenue.”

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“Overall, a large portion of security spending is driven by an organization’s reaction toward security breaches as more high profile cyberattacks and data breaches affect organizations worldwide,” said Ruggero Contu, research director at Gartner. “Cyberattacks such as WannaCry and NotPetya, and most recently the Equifax breach, have a direct effect on security spend, because these types of attacks last up to three years.”

This is validated by Gartner’s 2016 security buying behavior survey*. Of the 53 percent of organizations that cited security risks as the No. 1 driver for overall security spending, the highest percentage of respondents said that a security breach is the main security risk influencing their security spending.

As a result, security testing, IT outsourcing and security information and event management (SIEM) will be among the fastest-growing security subsegments driving growth in the infrastructure protection and security services segments (see Table 1).

Table 1

Worldwide Security Spending by Segment, 2016-2018 (Millions of Current Dollars)

Source: Gartner (December 2017)

Gartner analysts said that several other factors are also fuelling higher security spending.

Regulatory compliance and data privacy have been stimulating spending on security during the past three years, in the US (with regulations such as the Health Insurance Portability and Accountability Act, National Institute of Standards and Technology, and Overseas Citizenship of India) but most recently in Europe around the General Data Protection Regulation coming into force on 28^th May 2018, as well as in China with the Cybersecurity Law that came into effect in June 2016. These regulations translate into increased spending, particularly in data security tools, privileged access management and SIEM.

Gartner forecasts that by 2020, more than 60 percent of organizations will invest in multiple data security tools such as data loss prevention, encryption and data-centric audit and protections tools, up from approximately 35 percent today.

Skills shortages, technical complexity and the threat landscape will continue to drive the move to automation and outsourcing. “Skill sets are scarce and therefore remain at a premium, leading organizations to seek external help from security consultants, managed security service providers and outsourcers,” said Mr. Contu. “In 2018, spending on security outsourcing services will total $18.5 billion, an 11 percent increase from 2017. The IT outsourcing segment is the second-largest security spending segment after consulting.”

Gartner predicts that by 2019, total enterprise spending on security outsourcing services will be 75 percent of the spending on security software and hardware products, up from 63 percent in 2016.

Enterprise security budgets are also shifting towards detection and response, and this trend will drive security market growth during the next five years. “This increased focus on detection and response to security incidents has enabled technologies such as endpoint detection and response, and user entity and behavior analytics to disrupt traditional markets such as endpoint protection platforms and SIEM,” said Mr. Contu.

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With billions of dollars under management, QIC ensures that it operates in a strictly secure and confidential environment. As QIC expanded internationally, the company adopted a cloud-first digital strategy to enable its staff, clients and partners around the world to exchange information and documents safely from any location.

Grant Slender, Information Technology, Security and Risk Leader at QIC, said, “Trust is a top priority in investment management and for QIC. We take all necessary steps to prevent even the slightest security breach to protect our clients and our firm. A key component of that effort is our adoption of BlackBerry Workspaces, which allows our employees to share, edit and control sensitive files securely and seamlessly, both inside and outside QIC, in a mobile and cloud-based environment including Microsoft 365, OneDrive and SharePoint.”

Alex Manea, Chief Security Officer, BlackBerry, explained, “In today’s digital and mobile age, companies in any industry need to enable staff, clients and suppliers to be productive and collaborative. The challenge lies in adopting flexible next-generation technologies such as cloud, without hindering data security. At BlackBerry, we are helping governments and private companies to navigate these security challenges, as well as manage very complex regulatory requirements.”

BlackBerry Workspaces’ file sync and sharing functionalities are fully integrated into the new Microsoft Office 365 framework, enabling QIC to maintain the highest level of security required to safeguard client information. BlackBerry Workspaces is also used to power advanced collaboration, such as digital ‘deal rooms’ for investment negotiations. Using these secure and confidential ‘deal rooms’ is transforming how QIC does business with its clients and partners, making it easier and more secure than ever before to discuss and make strategic investment decisions.

BlackBerry Workspaces gives QIC an independent and auditable way to manage the collaboration of documents and information with third parties, as the IT department has complete control over all files, and total visibility into how, where and when those files are accessed or modified. Additional tools also enable staff and IT to easily trace and protect attachments in outgoing emails, and transfer data while maintaining security and control.

Alex Manea added, “With European GDPR and Australian Data Breach Notification laws going live in early 2018, many Australian organizations must comply with these strict security and confidentiality requirements, or face serious consequences. The time is now for forward-thinking companies like QIC to take action to address cloud security and compliance challenges and become BlackBerry Secure.”

Grant Slender concluded, “In our business, it is vital that we minimize migration risks, which is challenging as many next-generation business collaboration apps are still interdependent with legacy systems. BlackBerry Workspaces and Microsoft 365 integrate smoothly, and the transition has been seamless. Our clients and partners can draw confidence from the fact that we have clear, demonstrable file security in place, which is essential to maintaining trusted relationships.”

BlackBerry recently announced that the company received the highest score in two use cases in Gartner’s Critical Capabilities for Content Collaboration Platforms report¹. BlackBerry received the highest scores in Workforce Productivity and Centralized Content Protection for its BlackBerry Workspaces solution.

¹ Gartner, Critical Capabilities for Content Collaboration Platforms, by Karen A. Hobert, Monica Basso, Michael Woodbridge, September 12, 2017

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“Despite market weakness in China, sales of smartphones rose in the third quarter of 2017 (see Table 1),” said Anshul Gupta, research director at Gartner. “Emerging Asia/Pacific (15 percent increase) and North America (11.2 percent increase) drove the smartphone growth in the quarter.”

“In emerging Asia Pacific, both Samsung and Huawei saw healthy demand as along with Xiaomi and Vivo, which were able to grow their footprint outside their home markets,” added Mr. Gupta. “In North America, Samsung was the driving force in the quarter due to its new flagship products.”

Samsung’s smartphone sales recorded a double-digit increase (19.3 percent) in the third quarter of 2017. “Renewed pushes of the newly designed Galaxy S8, S8+ and Note 8 smartphones have brought back growing demand for Samsung smartphones, which helped it compete against Chinese manufacturers and deliver a solid performance in the quarter,” said Mr. Gupta. “”The last time Samsung achieved a double-digit growth was in the fourth quarter of 2015.”

Apple’s sales grew 5.7 percent year over year. Apple returned to growth in China and also saw strong sales in many of the emerging markets, including India. This is due to the continued sales of legacy iPhones, including the iPhone 5S which retails at around $240 street price in most markets. 

Table 1

Worldwide Smartphone Sales to End Users by Vendor in 3Q17 (Thousands of Units)

Source: Gartner (November 2017)

Xiaomi achieved the strongest growth, exhibiting an 80 percent increase in the third quarter of 2017. Xiaomi’s growth came more from international markets than from China, where it faces strong competition from Huawei, Oppo and Vivo. India continues to be the biggest and highest-growth market for Xiaomi outside China, but growing sales from Latin America and Russia are also boosting its sales.

Greater China exhibited a decline of 11 percent in the third quarter due to consolidation around local and lesser-known brands (see Table 2). Buyers are preferring known and high-priced smartphones, which is cannibalizing demand of budget smartphones from local brands. In Western Europe and North America, demand for premium smartphones from top brands led to smartphone sales growth in the third quarter.

Table 2

Top-Five Regions for Smartphone Sales to End Users in 3Q17 (Thousands of Units)

Source: Gartner (November 2017)

Leading Chinese manufacturers Oppo, Huawei, Vivo and Xiaomi continued to drive sales across emerging markets, led by their midprice and budget smartphones with a focus on 4G connectivity and better cameras.

“The arrival of Apple’s new flagship iPhones at the end of the third quarter of 2017 has delayed smartphone purchases into the fourth quarter of 2017,” said Mr. Gupta. “Following compelling offers on Black Friday and Cyber Monday, the holiday season will likely boost sales of smartphones before the end of the year. We estimate the fourth quarter’s smartphone sales will boost total sales for the full year. We expect smartphone sales will reach 1.57 billion units in 2017,” concluded Mr. Gupta.

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Software and IT services continue to exhibit strong growth with device spending continuing to drive the majority of the overall IT spending in the Indian government sector. Software spending is projected to growth 15.6 percent in 2017, and will grow another 15.1 percent in 2018 to reach $1.2 billion (see Table 1). IT services spending is on pace to grow 15.3 percent in 2017 to total $2 billion in 2017, and increase 13.8 percent in 2018 to reach $2.3 billion.

“Spending on devices, which includes printers/copiers/MFPs, mobile devices, PCs and tablets, is estimated to see the highest growth in 2017, with an increase in spending by nearly 21 percent to reach $1 billion,” said Moutusi Sau, principal research analyst at Gartner. “This will further increase by another 9.4 percent to reach $1.1 billion in 2018.”

“The Indian government sector is picking up pace again after the brief slowdown in the past two quarters due to effects reverberated by demonetization and a drop in industrial production,” said Ganesh Ramamoorthy, managing vice president at Gartner India.

Several initiatives by the government, such as the Make in India, Start-up India, Skill India, and the corresponding policy frameworks to support these initiatives, such as the new electronics policy, software product policy, data security and protection policy, will have a positive effect on government IT spending in the near future. However, the chief among all these initiatives is the Digital India programme.

“The Digital India programme, which aims to transform the country into a digitally-empowered society and knowledge economy, will call for technology investments in the backbone infrastructure, advanced data analytics, digital security, digital payment and e-commerce infrastructures, digitally-enabled G2G, G2B and G2C services, and score of other related services,” said Mr. Ramamoorthy. “This will be the key driver for IT spending growth in the Indian government sector over the next five years.”

Digital government relies on the use and reuse of data and analytics to simplify transactions for end users. It creates information from data to support and enhance decision making, and it fosters the creation of new, collaborative and disruptive service delivery models. In the process, underlying service models are re-engineered to improve mission effectiveness and to achieve long-range cost savings through optimized outcomes.

To be successful, Indian government’s digital strategy must address a variety of issues. “While focusing on citizen services is an essential element of the digital strategy, the main and more sustainable benefits will come to the government from the transformation of its internal data and processes,” said Ms. Sau.

Therefore, establishing a sustainable collaboration among stakeholders in different domains and tiers; adopting more flexible funding, agile procurement and project management processes; improving IT workforce skills and management practices; and securing the technologies and/or services needed to support the digitalization of government business functions, will all be very essential for the Digital India programme to succeed.

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Gartner defines intelligent automation services as the umbrella term for a variety of strategies, skills, tools and techniques that service providers are using to remove the need for labor, and increase the predictability and reliability of services while reducing the cost of delivery.

“Intelligent automation will alter the provision of managed workplace services over the next few years, increasing service quality at a lower price,” said DD Mishra, research director at Gartner. “Sourcing and vendor management leaders must prepare to restructure these services and renegotiate contracts to leverage intelligent automation. Automation-driven improvements in service delivery and pricing will allow sourcing and vendor management leaders to select a wider range of moving managed workplace services (MWS) outcomes that will improve quality and cost simultaneously.”

Moving MWS functions from ones that are solely resourced by humans to functions that have a mix of humans and intelligent automation services (IAS) will create benefits in both pricing and service quality. The replacement of human labor by such mixed services can only occur if the automated services offer a cost reduction for the service provider. Many service providers recognize that they cannot continue to resource MWS by simply adding more service heads and thus are investing heavily in IAS for this reason.

As IAS provision becomes part of MWS, providers will pass on part of the resultant cost savings to clients in an attempt to win business. For services such as service desks, intelligent automation tools can be up to 65 percent less expensive than offshore-based staff. Up to 2021, Gartner expects the costs of commodity services to decline by 15 percent to 25 percent annually, as they move toward this price point.

Ongoing reductions in outsourced head count due to intelligent automation will eventually force sourcing and vendor management leaders to redesign the workplace services for their organizations’ users. This will result in a corresponding drop in the numbers of staff required on the service desk, so that when 70 percent of the workload is dealt with by IAS, only 30 percent of the staff will remain. Eventually, the potential for vendor lock-in, driven by a dependency on new tools and the IP they create, will require sourcing and vendor management leaders to incorporate new risk management provisions in MWS contracts.

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The finalists presented their case studies during Gartner Symposium/ITxpo and winners were selected by the audience. The overall regional winner for EMEA was National Bank of Greece (NBG). Winners and finalists for each of the three categories were as follows:

Most Innovative Digital Business Model

Winner: Absa Bank — Absa Bank wanted to help the 50 percent of people under the age of 30 in South Africa who are declined credit because they have insufficient credit history, despite the possibility of them having sufficient affordability. By leveraging modern-day scoring methodologies and technologies, the bank has broken the boundaries that previously defined credit-lending practices by testing the viability of new social media data points as a viable data source, hence driving financial inclusion. Using a new social media scoring model, Absa has found a way to provide alternative lending methods by making use of advanced analytic techniques to capture previously rejected and nontraditional customers. The digital solution leverages the power of social data from Facebook, LinkedIn and Twitter to create a score, which serves as an indicator for customer ID verification and fraud prevention. Absa estimates that this will boost financial inclusion of people under the age of 30 in South Africa to 58.8 percent.

Finalist: Standard Chartered — In partnership with American International Group (AIG) and IBM, Standard Chartered has successfully piloted the first multinational, “smart contract”-based insurance policy using Blockchain, a distributed ledger technology that radically enhances the level of trust between insurers and the companies they protect. The blockchain solution is unique in that it not only enables Standard Chartered and AIG to execute multinational coverage more efficiently, but it also brings a new level of certainty and clarity to the underwriting process and enables the bank to achieve improved transaction security across multiple business locations. An initial pilot program has shown that blockchain could lower the administrative burden on both the insurer and insured while streamlining operational efficiencies for employees.

Finalist: VKB Insurance — Versicherungskammer Bayern (VKB) is one of the first insurance companies in Germany to have built an innovative and cost-efficient Hadoop platform for analytics with structured and unstructured data. As a result, multiple use cases exist for improving customer experience, increasing efficiency of automation, and creating a new business model for partner banks and other public insurances. One such example is the screening of incoming written communication from customers using IBM’s Watson to conduct sentiment analysis. This helps to improve and personalize communication with customers and react to their complaints effectively.

Most Innovative Digital Customer Service or Product

Winner: National Bank of Greece — The National Bank of Greece (NBG) is keen to appeal to younger customers. In April 2017, it sponsored Greece’s largest youth music festival with the objective of turning the entire festival ticketless and cashless, while at the same time introducing a new product to the market that would appeal to the youth market. NBG developed a contactless wristband that would further extend the capabilities of its existing mobile wallet solution, i-bank Pay, a waterproof Visa prepaid card in microtag form that fits inside a wristband. More than 27,000 festival goers used the paybands at the event and NBG hopes for an “adoption rate of 10 percent of initial users who will go on to bank with them and use i-bank Pay in the future.”

Finalist: DenizBank — Denizden Topraga is a “first of its kind” augmented agricultural intelligence app that opens up the possibility of large-scale farming to agriculturists of all sizes. The app is unique in offering a wide range of agricultural advice, a price comparison site for farmers from across Turkey, a social network for farmers, a mechanism for sharing farming machinery and the latest agricultural news, all in one app. DenizBank hopes that more than 40,000 users will join the app’s first active wave in the first quarter of 2018.

Finalist: Emirates NBD Group — The Emirates NBD banking group set out to test the feasibility of performing cross-border remittances over a blockchain network. Using a blockchain network for remittances offers an alternative to traditional SWIFT payment messages between Emirates NBD and ICICI Bank. The use case involved an ICICI Bank branch in Mumbai remitting funds to an Emirates NBD branch in Dubai in real time. The blockchain network eliminates the need for traditional financial messaging between banks, which can take anything from a few hours up to two days. The banks expect that reducing the reliance on SWIFT messages and shortening the settlement time frame will lower processing costs, with the savings ultimately being passed on to customers.
Most Innovative Digital Cost-Saving Initiative

Winner: Zurich Insurance — Zurich sought to improve the inefficiencies around the handling of injury claims with a cognitive computing solution to fully automate the injury report assessment. Zurich leveraged AI to fully automate the medical report evaluation, so handlers could focus on more value-added activities; for example, negotiating a settlement with the counterparty. Software robots were also deployed to take over more simple tasks such as rekeying information or updating databases. The combination of the cognitive solution and the software robots enabled Zurich to significantly improve the process productivity using AI, while ensuring that the quality in decision making was at least as good as in the old process. KPIs included the assessment for a medical report being cut from around one hour to just a few seconds, some 40,000 hours of manual work have been saved, accuracy in the claims handling process has improved, and the overall run rate benefits from this solution are $5 million per year.

Finalist: Aksigorta — When Turkey insurance company Aksigorta wanted to enter the motor third-party liability (MTPL) fleet insurance market, it realized that upgrading its IT systems to support this type of mass fleet operation would take up to four months, which would effectively see it missing the peak demand season. After a successful pilot, the IT department decided to use robotic process automation (RPA) to launch its RobotX core RPA project. The company estimated that, had it taken its existing approach, the system development cost of selected projects would have been 500 days, but the RPA solution cost was only 150 days, increasing revenue by more than 5 percent.

Finalist: Mashreq Bank — Banks in the Middle East and Africa are increasingly investing on Fintech solutions to sustain and differentiate their offerings. Before taking a plunge into next-generation technologies like cognitive automation and artificial intelligence (AI) to leverage big data and address changing customer expectations, Mashreq wanted to integrate and optimize systems and processes, streamline operations, improve efficiencies and accelerate customer satisfaction. It thus implemented an intelligent, unified digital platform for business operations and customer experience, becoming the only private bank in the region to capitalize on digital and RPA technologies to deliver intuitive services to customers. In the first phase, this digital platform has not only optimized efforts, automated manual processes and standardized them across branches in all regions, but it has also provided end-to-end integration and 360-degree enterprise visibility powered by gamification, supporting well-informed interactions, augmenting productivity and providing enhanced decision-making capabilities.

Award submissions were assessed using a robust and dynamic framework to ensure that the assessment process remained pertinent and objective. The Gartner Awards Framework (GAF) is utilized as a structured model of assessment that enables the participating organizations to be benchmarked against world-class performance standards. The GAF consists of specialized assessment modules pertaining to the evaluation criteria for each of the award categories. The criteria and subcriteria provide a robust set of requirements that are used as the methodology for benchmarking and learning among the participating organizations.

The identification of a Gartner award winner or finalist is not an endorsement by Gartner of any vendor, product or service.

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According to Gartner’s 2017 CEO survey, 42 percent of CEOs are now taking a digital-first approach to business change or taking digital to the core of their enterprise model. To fund digital initiatives, CEOs indicate that the largest bulk of money comes from self-funding, rather than existing budgets, as they see the primary purpose of digital initiatives to win revenue rather than to save costs.

“This should give CIOs pause for thought, given conventional IT management works mostly on the basis of using operating budgets,” said Andy Rowsell-Jones, vice president and distinguished analyst at Gartner.

“Transformation requires commitment, leadership, strategy, technology, innovation and importantly, money,” Mr. Rowsell-Jones said. “This year and next are likely to be the optimal timing points of overlap between the business cycle and the tide of digital business change. In two years’ time, the rising cost of capital could make strategic investment more expensive, and playing digital catch-up is harder.”

The top 10 ways to fund the shift to digital business are:

1)     Internal self-funding: digital revenue pays

This will only work for short-term projects to gain immediate revenue returns, such as for digital marketing campaigns or price-elevating digital product features. This approach needs clear revenue attribution and is good for continuous, incremental growth, but will not work for disruptive market change.

2)     Within existing budgets

It can work for relatively superficial digital business change over two to three years, if budgets are healthy, already generous and need trimming. It is not good for rapid transformation as it might throttle existing business. 

3)     Investment from reserves

Reserves are the part of profit set aside for internal reinvestment to help the business in tough times, which digital disruption and market loss might fit under. If reserves are healthy, it might accelerate digital transformation with low financial impact on current operations.

4)     Increase relevant budgets and cut others

This option requires a very clear understanding of how digital business growth will substitute heritage business slowdown. It is useful if digital business is recognizable and deliverable in the same corporate structure to the same customer base, but not appropriate for adjacency moves or radical industry reinvention.

5)     Increase relevant budgets and cut profits

Relevant to deep, multiyear strategic change, requiring clear and careful explanation to investors. It may be easier if a disruptive, threatening competitor makes the transformation need more obvious to all, or for private or family-held companies with long-term planning horizons and fewer owners to convince.

6)     New bond or equity capital from investors

If digital transformation requires heavy, multiyear investment, fresh capital may need to be raised. Smaller companies with faster growth rates can raise equity capital from investors by issuing more shares. Larger mature companies with strong reputations can raise debt capital by issuing more corporate bonds.

7)     Borrow capital from lenders

Loan capital is typically shorter term, more tactically arranged and helps bridge gaps arising from digital transformation. It is usually only available for conventionally describable, measured risk situations, rather than for speculative entrepreneurial action or situations of industry reinvention. 

8)     Off balance sheet entries

Another option is to place all or part of the new digital product, service or activity in a separate company shell with investors, benefiting “risky” or “unusual” experiments. This is useful for “farming” digital ecosystems and startups by working with VCs and incubators as co-founders, as well as for industry consortiums.

9)     Divestitures

When digital disruption is serious in an industry, one strategy can be to sell legacy business units early to buyers that are happy to run them in their declining years. The capital receipts from divestitures can then be used to help fund the growing new digital business ventures and revenue streams.

10)   Asset disposals

Some assets that were useful in the past but have less relevance in digital business may have a market value to others. Cycling out old physical assets to pay for digital growth can work where “dematerialization” is in play.

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“Digital transformation and its related technologies such as APIs are more important for banking than for other industries,” said Pete Redshaw, managing vice president at Gartner. “Banks and other banking and investment services organizations clearly recognize that the status quo is not sustainable, and they must disrupt themselves before it is done to them.”

Top Business Objectives

When it comes to strategic business priorities, the survey found that digital business/digital transformation is more important for banking (first priority for 26 percent of respondents) than for all industries (17 percent). Just behind digitalization on 25 percent, growth/ market share is a further key priority, followed by complementary focus areas of profit improvement and customer focus (12 and 11 percent respectively).

Banking and investment services CIOs also place a relatively high priority on the globalization of their businesses (seven percent), a priority which does not make the top 10 at all for the all-industries average. Geographic expansion is clearly important for a business that is (1) easier to scale over physical distances using electronic movements of money, and (2) seeking higher growth in emerging markets.

Top Tech to Win

In response to the question ‘Which technology areas do you think are most important to helping your organization differentiate and win (achieve your mission)?’ BI/analytics topped the list with banking sector CIOs at 26 percent followed by digitalization/digital marketing at 21 percent.

In terms of differentiating technologies, four categories stand out when compared to other industries

–       Artificial intelligence (AI) is seen as more differentiating (eight percent) for banking than the all-industries average (five percent).

–       The combination of application programming interfaces (APIs) at four percent and omnichannel/multichannel at three percent are not especially high, but they are not present at all in the all-industries top 10.

–       Legacy modernization is a top 10 item for the banking industry, but not present in the all-industries list.

–       The Internet of Things (IoT) is a top-10 item for all industries (six percent), but is not present for banking and investment services.

“These priorities point to a continuing tension between two opposing forces,” said Mr. Redshaw. “On the one hand, there is a need to rapidly transform the business, while, on the other hand, there is the innate inertia that arises from a huge IT estate that supports a heavily regulated industry.”

It should be noted that blockchain does not feature (it ranked twentieth for banking and investment services). Despite the attention and visibility, it is not yet seen as a differentiating technology for banks. That may change in the near future.

Figure 1. Top Tech to Win

Source: Gartner (October 2017)

Top New Tech Spending

Planned additional spend on digitalization/digital marketing is also much more prominent in the banking and investment services sector (22 percent) than the all-industries average (12 percent).

“This is an industry that recognizes that a firm must become truly digital – in culture, value and technology – if it is to stand a chance of surviving and thriving,” Mr. Redshaw said.

Cloud is ranked lower in the banking sector (fourth versus second for all industries) but has the same percentage assigned to it (13 percent). Banks would like to make more use of public cloud, but are held back by their risk-averse culture and their regulators.

For AI, there is only a small difference in absolute terms between banking and all industries, but it is a large one in relative terms (7 versus 4 percent — nearly double). Being able to turn raw data into actionable information by spotting unexpected patterns or developing superior algorithms will strongly differentiate banks that do this well from their more mediocre rivals.

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