How Banks’ Technology Spending Affects Performance

Thomas Désiré and Jordan Pandolfo
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Jordan Pandolfo: https://www.kansascityfed.org/research-staff/jordan-pandolfo/

Economic Bulletin, 2026, 4

Abstract: Over the past two decades, banks have substantially increased their investment in information technology (IT) and data analytics. We estimate the dynamic relationship between IT spending and bank outcomes related to performance. We find that increased IT spending is associated with higher bank profits, increased income from deposit accounts, and lower loan default rates.

Date: 2026
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