Open Finance and analytics drive tech budget uplift in Brazilian banks
Technology budgets in Brazilian banks are set to increase this year as digital transformation accelerates in the sector, according to a yearly report by the National Banking Federation (FEBRABAN), carried out by Deloitte.
According to the study, tech budgets are set to reach $7.4 billion in 2022, up 18% in relation to last year. The estimate is based on the responses from 17 Brazilian banks, which concentrate around 82% of all banking assets in Brazil.
Security
Within last year's total tech budget at Brazilian banks of $6.3 billion, investments alone represented $2.3 billion, a 27% increase in relation to the prior year, while the remainder refers to expenses, which also saw an increase of 6%.
The increase illustrates the "robust and growing investments" made by Brazilian banks in technology over the last three decades, according to Isaac Sidney, president at FEBRABAN. "The digitization process is irreversible and it is essential to continue investing in technology to increasingly offer security, convenience and an excellent experience to customers," he noted.
Investment in software accounted for 58% of all investments in technology at banking institutions in 2021, a 29% increase from the previous year. The boost is attributed to the current focus on areas such as Open Finance, data analytics, and customer relationship management (CRM), as well as the ongoing modernization of the technology legacy at banks.
The second phase of the FEBRABAN annual research follows an initial stage of the study released in April, which has found that artificial intelligence and cybersecurity are also among the top priorities of Brazilian banks.
Hardware spending accounted for 27% of the total tech budgets of Brazilian banks, while telecom represented 8%. The study started to track services spending, which also saw an increase, of 7%.
Talent investment was also highlighted in the research: last year, banks invested $1.2 million in cybersecurity training, an increase of 138% over the previous year. In 2021, over 93 thousand banking professionals were trained in cybersecurity, compared to 28.6 thousand in 2020, a 227% increase.
There was also an increase in investments in cybersecurity training specifically for IT professionals, which reached $122 million in 2021, a 268% boost in relation to the prior year. The number of individuals trained also grew, from 5,400 to 6,900 people, a 28% increase in relation to 2020.
The survey also included an indicator on training in agile methodologies: nearly 140,000 banking professionals from different areas within Brazilian banks were trained in that area in 2021.