This white paper discusses the importance of effective supplier spend management in the banking industry, where the cost-to-income ratio ranges from 10% to 30% and supplier spend falls between €2B to €10B. The paper identifies two macrotrends driving banking procurement decisions: the shift towards digital banking, which is driving up technology spend, and inflationary pressure on bought-in supplier goods and services. The shift towards digital banking has led to significant shifts toward technology spending for resource-strapped procurement teams, and legacy banks are wrestling with outdated infrastructure. Overall, technology costs are forecast to increase by 7% to 8%. Inflationary pressure on bought-in supplier goods and services is also expected to increase, with wage growth rates across the EU and UK of 3.8% and 4.2%, respectively. Many EU banks leverage offshore delivery networks and BPO providers, and labour inflation in key banking markets such as India is forecast at 9.8%.
