January 24, 2014 - Tech spending by North American banks is expected to hit nearly $60 billion in 2014, marking a return to confidence in the sector after years of underinvestment.

The latest data from Celent shows North American IT spending growth rising at a solid clip, from $56.9 billion in 2013 to $59.5 billion in 2014, representing a 4.5% increase.

Looking further ahead, the analyst house suggests that growth will be consistent and climb slightly in 2015, as tech outlay in the sector reaches US$62.2 billion, an increase of 4.6%.

Celent describes the figures as "encouraging", with 2014 building on the IT budget uplift experienced in 2013.

Celent forecasts strong growth in retail banking spending - key priorities include the monetisation of digital channels, enhancements to the user experience, and omnichannel sales and service endeavors. Spending on wholesale banking will also continue to climb, says the firm, particularly as midsize banks look at upgrading aging cash and treasury management solutions.

"The good news is that new investment spending is skyrocketing and that maintenance allocations are on the decline," says Jacob Jegher, research director with Celent's Banking Group and author of the report. "It's still quite challenging to get projects funded, however. Projects are encouraged but highly scrutinised, and they come with the requirement of a fast return on investment."

The figures from Celent are at odds with an earlier report from Technology Business Research published in August last year. The latter forecast a 2014 tech spend of $73.8 billion by "large North American financial institutions". The numbers, based on surveys and interviews with IT and business execs at 201 finance firms, were billed as a mere two per cent rise on 2013.