Chris Skinner's blog

Shaping the future of finance

Banks waste billions on digital

Chris Skinner Author Avatar

How much money is wasted by banks on digital?

I wonder whether, one day, anyone will work out how much money has been wasted by banks on digital technologies. Various reports reckon that banks spend anything from half a trillion dollars a year on tech to over a trillion.

Two years ago, Accenture found that only 1 in 10 banks were committed to digital transformation; 4 in 10 were trying to transform, but had no cohesive strategy; and 5 out of 10 weren’t making any progress at all. Meanwhile, an IDC analysis estimates that 70% of all digital transformation initiatives do not reach their goals. Of the $1.3 trillion that was spent on digital transformation in 2018, it was estimated that more than $900 billion went to waste.

Whatever the numbers and whatever the dialogue, something is not right. I’ve personally noted that banks like JPMorgan Chase, Citibank, Bank of America and Wells Fargo are spending around $50 billion a year on technology by themselves combined. These are massive numbers when, in context, you consider that the total amount invested globally in FinTech in 2020 is estimated to be $44 billion, less than America’s Big 4 banks spend on technology.

In fact, compare those numbers, whatever they be. At a conservative estimate, for every $1 invested in a FinTech, $20 is spent on bank tech.

Now OK, OK, OK. It may be that $15-$18 of the spend on bank tech is on keeping the lights on, maintaining the machines, keeping operations running, and so on. That means a maximum $5 and likely just $2 is spent by banks on innovation. That’s still twice as much as the number being invested in FinTech innovations, so where is the innovation? I don’t see it.

What I see is banks maintaining systems and approaches, but not innovating. Yet, why is this? Banks have had Chief Innovation Officers and Chief Digital Officers for years. What are they doing? Where is the innovation? Where is the digital innovation?

I guess the answer, which comes through clearly in Accenture’s report, and my own analysis in books like Doing Digital , is leadership.

Does the bank’s executive leadership team:

  • take digital transformational change seriously?
  • understand what digital transformational change means?
  • know how to implement digital transformation correctly?
  • realise it’s nothing to do with technology?

On that last point, it’s the most critical point. Digital transformation really has little to do with technology.

Technology is the core infrastructure and tool behind digital transformation, but digital transformation is more about culture and organisational change than about technology. It’s about:

  • changing the mindset of the people in the bank;
  • the rewards and remunerations structure being charged towards digital measures;
  • the products and services being redesigned around customers needs and wants rather than traditional bank views of sales and revenues;
  • a new attitude towards customer engagement based upon remote relationships, rather than relationships that are branch-based and focused upon share of wallet and cross-sell ratios;
  • creating engagement through amazing digital experiences rather than selling products through channels

… the list goes on and on.

Clearly, if you get the point being made above, digital transformation is about the leadership of the bank being completely committed; not just delegating digital change to some project, function, budget and titled character who is a CDO or CIO.

Is that clear enough?

Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

Intelligent Money: Our Future Is Where We Do Not Think About Money, As Our Money Thinks For Us

What is the future?

Learn more

Learn more about Chris

About Chris Skinner

The Past, Present And Future Of Banking, Finance And Technology

Fintech expert Chris Skinner: countries need digital transformation to remain competitive

Join me on Linkedin

Follow Me on X!

Hire Chris Skinner for dinners, workshops and more

Learn directly from from one of the most influential people in technology, gain insights from the world's most innovative companies, and build a global network.

Chris’s latest book

Order now

Chris Skinner’s ‘Intelligent Money’ Book Launch Event

Top 50 Global Thought Leaders and Influencers on FinTech 2023

Chris Skinner
Commentator, CEO of The Finanser and best-selling author at The Finanser

Thinkers360 Thought Leader

Contact Me

Global Awards

Lifetime Achievement Award

Global 100 - 2024 Winner

Chris Skinner - Financial Markets Advisor of the Year - The Finanser - UK 2023

Best Financial Markets Advisor of the Year 2023

30 Best Regtech Blogs and Websites 2023

Kids creating the future bank | TEDxAthens

Captain Cake and the Candy Crew

Captain Cake Winner of a Golden Mom’s Choice Award


Alex at the Financial Services

Gaping Void's Hugh MacLeod worked with the Finanser