Financial institutions are bracing for higher data budgets in 2025 primarily driven by cloud infrastructure and AI technology. 

Nearly 94% of FIs are expecting increased data management budgets, according to London-based data service provider Gresham Technologies’ Dec. 9 report, “Financial firms’ digital wake-up call.” Gresham surveyed 200 senior data professionals working in financial services across the United Kingdom and United States in 2024 for the report. 

Data budgets encompass all expenditures related to the acquisition, storage, processing, management and distribution of data, including cloud costs and AI-driven application costs, Neil Vernon, chief technology officer at Gresham, told Bank Automation News.

JPMorgan aims to invest $3 billion on cloud and data infrastructure in 2024 to meet the growing importance of data analytics in its operations, Daniel Pinto, chief operating officer at JPMorgan, said during the bank’s investors day presentation on May 30, the most recent data available. 

The New York-based bank spent $3.2 billion in 2023 on cloud and data infrastructure as well as cybersecurity, according to the bank’s 2023 investors day presentation on May 22, 2023. 

The $3.5 trillion JPMorgan is one of the few banks that breaks out its tech expense by sector.

“Organizations are increasingly leveraging AI to enhance analytics, improve decision-making and automate processes, all of which require high-quality, large-scale datasets,” Vernon said.  

According to the report: 

• 77% of respondents have department-specific budgets that make costs difficult to manage; 

• 44% of respondents struggle with warehousing data across multiple locations; and 

• 21% cited too much data via different entry points, leading to high data costs. 

Cloud infrastructure

Cloud costs have become a huge factor in data management, Vernon said, adding that many FIs are moving to the cloud to take advantage of its flexibility and scalability. Citizens Bank, for one, is aiming to move its operations to the cloud by the end of 2025. 

While the initial lift can be expensive, moving operations to the cloud can be cost-effective due to low maintenance, fewer upgrades and minimal manual intervention costs, Vernon said. 

As FIs move operations to the cloud, many vendors like Snowflake are providing data integration and management services that can help reduce costs, Vernon said. 

Some vendors are also providing Data-as-a-Service (DaaS) which helps pre-validate and standardize data before moving it to the cloud, Vernon said, adding that “DaaS can provide a commoditized and cost-efficient approach, as vendors often leverage economies of scale to deliver high-quality data solutions.” 

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