The IT industry is set to experience a turnaround, driven by advancements in cloud computing, data analytics, and artificial intelligence.

The banking and financial services sector is expected to see a return to normal revenue levels by FY26. A report from Kotak Institutional Equities highlights that US BFS firms are increasing their discretionary spending to modernize their legacy systems and improve competitiveness. Notable examples include Citi retiring 450 applications and Franklin Resources consolidating their investment technology onto a single platform.

While some banks are prioritizing technology investments, others are focusing on regulatory and compliance issues. Wells Fargo, TD Bank, and Discover are among those prioritizing compliance upgrades, with TD Bank committing to an annual expenditure of $500 million through CY2026 following a significant regulatory fine. On the other hand, Morgan Stanley reports double-digit growth in tech spending, and Goldman Sachs plans to invest in engineering and technology platforms despite ongoing cost-cutting measures.