IT Spending in Payments at U.S. Banks

May 17, 2004


New York, NY, USA  May 17, 2004

Celent announces that U.S. banks internal IT spending on non-card payment systems will climb to US$1.0 billion in 2004, boosted by the overhaul of the check processing infrastructure.

In a new report, " ," Celent provides an introduction to current bank internal information technology (IT) spending on non-card payment systems in the U.S..

The report reveals that U.S. bank internal IT spending on non-card payment systems will grow 37% between 2004 and 2003 compared with 24% between 2003 and 2002 and 14% between 2002 and 2001. Massive investment in check processing will drive this short-term spike.

Bank internal IT spending on non-card payments will reach $1.0 billion in 2004, up from US$0.7 billion in 2003 and US$0.6 billion in 2002. This spending will account for 2.7% of the total IT budget of U.S. banks in 2004, up from 2.1% in 2003 and 1.7% in 2002.

Celent痴 finding indicate that bank internal IT spending on non-card payments is growing much more rapidly than overall bank IT budgets. "Banks view payments as a critical component of their value proposition, and consequently they are investing to generate efficiencies and gain competitive advantages" comments Gwenn B騷ard, a Senior Analyst at Celent and author of the report.

The current growth in internal IT spending is good news for payment technology vendors. However, moving forward, "the trend toward utility computing will likely reshape the payment technology industry by forcing application vendors to change the way they produce, price, and deliver their technologies" adds B騷ard. Commoditization is looming as the major threat facing payment application makers.

The 19-page report contains 20 figures.

A is available online.

of Celent Communications' Retail Banking and Wholesale Banking research services can download the report electronically by clicking on the icon to the left.  Non-members should contact for more information.


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Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

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Table of Contents


New York, NY, USA May 17, 2004

Return to report Abstract


  Definition 5
  Distinct Paths 5
  Check Processing Aberration 7
  Spending Patterns 9
  ACH Origination & Processing 11
  Check Processing 12
  Retail Lockbox 13
  Wholesale Lockbox 14
  Cash Handling 15
  Wire 16

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