Banking deals don’t traditionally include promises to build a technology hub. But that’s what ANZ Banking Group offered the Australian state of Queensland, better known for its beach holidays than its tech or financial infrastructure, to sweeten its bid for state-controlled Suncorp Bank. The takeover bid was rejected by the Australian Competition and Consumer Commission in August, but the two parties have appealed. If the deal is approved, it’ll be the biggest in Australian banking since 2008.

It’s also a sign of how technology is shaping bank office strategies, in that they are selectively expanding in markets where they want to grow their tech operations and can maintain robust talent pipelines, says David Purves, executive director, finance, resources and infrastructure, JLL.

“Digitalization is becoming a source of resiliency and innovation for banks that are operating in an environment of economic uncertainty, changing work preferences and increased regulatory pressures,” Purves says. “Tech transformation is critical to their long-term business growth.” 

JLL's research notes that the banking industry will deliver the largest investments in artificial intelligence as generative AI and machine learning is increasingly used to reduce costs.

Banks worldwide are expected to spend an additional $31 billion on AI embedded in existing systems by 2025 and will deliver the largest AI investments in 2023 across industries.

Meanwhile, the largest banks have increased hiring for software developers and data scientists by 90% since 2018. One example: Morgan Stanley using OpenAI’s GPT4 platform as a financial advisor solution to better serve clients and tap into the firm’s large repository of research and data.

“As banks accelerate towards AI and machine learning, corporate real estate portfolios have a critical role in enabling them to attract and retain top tech talent, provide the necessary infrastructure to support these technologies, and create a flexible and agile workplace that can adapt to changing business needs,” Bouzarouata says. “They have to remain competitive in this digital age.”