Global spending on technology in financial services reached $590 billion in 2025, according to IDC’s Worldwide Financial Services Technology Spending Guide. That figure is up 8.2% from 2024 and is expected to exceed $700 billion by 2028. The shift is not a recent development, but the pace has accelerated significantly in the past five years as banks, insurers, and asset managers compete to digitize operations, reduce costs, and meet the demands of a customer base that increasingly expects digital-first experiences.
How Technology Became Central to Financial Services
The relationship between technology and finance is decades old. ATMs arrived in the 1960s, online banking became mainstream in the late 1990s, and mobile banking apps spread rapidly after 2010. But the period from 2020 onward marked a turning point. The COVID-19 pandemic forced institutions that had resisted digital adoption to accelerate their timelines by years. According to a McKinsey report on emerging technologies in financial services, banks that invested in digital capabilities during 2020 and 2021 saw 20% higher revenue growth than those that did not.
Cloud computing, artificial intelligence, and application programming interfaces (APIs) are now standard infrastructure for most large financial institutions. Fintech is reshaping the $300 trillion global financial services industry, and that shift is driven in large part by technology investments from both startups and incumbents. JPMorgan Chase alone spends more than $15 billion annually on technology, and Goldman Sachs has described itself publicly as a technology company that happens to operate in finance.
Where Financial Institutions Are Investing
The largest areas of technology spending in financial services are cloud migration, cybersecurity, and data analytics. A 2025 Accenture report on banking technology found that 78% of banks globally have moved at least some core operations to the cloud, up from 45% in 2020. Cloud infrastructure allows banks to scale services without maintaining expensive on-premise data centers, and it supports the rapid deployment of new products.
Cybersecurity spending in financial services grew 14% year over year in 2025, according to Gartner’s security spending forecast. Financial institutions are among the most targeted organizations for cyberattacks, and regulators increasingly require firms to demonstrate strong digital defenses. The average cost of a data breach in financial services was $5.9 million in 2025, per IBM’s annual cost of a data breach report.
Artificial intelligence is another priority. Banks are using AI for fraud detection, credit scoring, customer service automation, and risk management. Fintech innovation is driving 40% faster financial product development, and much of that speed comes from AI-powered tools that automate processes that previously took weeks.
The Impact on Operations and Customer Experience
Technology has changed how financial institutions operate at every level. Back-office processes that once required manual data entry and paper records are now automated. Straight-through processing rates for securities trades exceed 95% at most large banks, compared with less than 70% a decade ago. Loan origination, which traditionally took days or weeks, can now happen in minutes through automated underwriting platforms.
Customer experience has also shifted. Mobile banking app usage surpassed branch visits for the first time in 2019, and the gap has widened every year since. According to Statista’s digital banking data, 3.6 billion people worldwide used digital banking services in 2025. Digital banking customers are expected to exceed 3.6 billion by 2028, and much of that growth is in emerging markets where mobile phones are more accessible than physical branches.
Chatbots and virtual assistants now handle a significant share of customer inquiries. Bank of America’s Erica virtual assistant processed more than 1.5 billion interactions since its launch, and similar tools are deployed at Wells Fargo, HSBC, and DBS Bank in Singapore.
What This Means for the Financial Industry
The growing role of technology creates both opportunities and challenges. Institutions that invest effectively can reduce operating costs, reach new customer segments, and launch products faster than competitors. A Boston Consulting Group analysis estimated that banks using advanced analytics and AI could improve their return on equity by 2 to 4 percentage points.
But the transition also raises questions about workforce displacement, data privacy, and the concentration of financial services among a smaller number of technology-driven firms. Regulators are paying close attention. The European Union’s Digital Operational Resilience Act (DORA), which took full effect in January 2025, requires financial institutions to meet strict standards for IT risk management and third-party oversight.
Smaller banks and credit unions face a particular challenge. They often lack the budgets to compete with the technology investments of global banks or well-funded fintech startups. Fintech platforms are growing faster than traditional banks in part because they were built on modern technology stacks from the start, without the burden of legacy systems.
Regional Differences in Technology Adoption
Technology adoption in financial services is uneven across regions. North America and Europe lead in total spending, but Asia-Pacific is growing fastest. China’s financial technology ecosystem, anchored by Alipay and WeChat Pay, processes trillions of dollars annually. India’s Unified Payments Interface (UPI) handled 16.6 billion transactions in February 2026 alone, according to the National Payments Corporation of India.
Africa has seen rapid growth in mobile money, with platforms like M-Pesa now operating in multiple countries beyond Kenya. Latin America’s fintech sector has grown significantly, with Brazil, Mexico, and Colombia leading in startup formation and digital banking adoption. According to the Inter-American Development Bank, Latin America had more than 3,000 fintech startups as of 2025.
The $590 billion that financial institutions spent on technology in 2025 reflects a structural shift, not a cyclical one. As customer expectations continue to rise and regulatory requirements expand, that number is likely to keep growing for the rest of the decade.
