Leading technology analyst Gartner has issued a report warning that "banks that are too big to fail may also be too big to succeed".The consulting firm warned that the increasing size and complexity of the world's big banks is outstripping the ability of their chief information officers to provide effective IT and operational support. While the chief information officers of Australia's Big Four banks may bridle at the suggestion that they are not up to the job, Gartner's warning is targeted at all banks with revenues above the US$10 billion mark.According to one of the report's authors, David Furlonger, "It is important to recognise that the IT organisation's resources cannot be expanded indefinitely to support never-ending increases in demand. CIOs must be able to identify high-priority projects that deliver real business value, and decline to support, or at least limit support to, other initiatives." The report points, for example, to the fast and furious investment made by banks in smartphone and tablet-based banking applications, but notes that 80 per cent of all mobile transactions are to check balances and so provide no value to the bank, although it still pays for, and constantly updates, the technical infrastructure underpinning the applications. Furlonger noted that there was evidence of a law of diminishing returns associated with unstinting investment in technology, as bank staff and customers used to innovation and technical excellence constantly demand more. Gartner noted this was a manifestation of the so-called Jevons paradox identified by British economist William Jevons in the 1860s. This holds that "that any technological progress that increases the efficiency with which a resource is used tends to increase (rather than decrease) the rate of consumption of that resource."Gartner released statistics showing that, on average, a bank with revenues of US$10 billion-plus spent US$30,903 per employee on technology, while a US$1 billion-to-US$10 billion bank invested US$27,712 per employee. The larger banks, however, achieved much lower profits per employee (US$104,000 compared with US$141,000 for the smaller banks).The technology analyst said this was not the case with other sectors - for example, utilities. These have invested in technology but not to the degree of complexity now common among the biggest banks. While utilities' technology-spend-per-employee figures also grew in line with the size of the utility so did their profit per employee. Gartner suggested utilities' apparent protection from the Jevons paradox was because they were less exposed to the consumerisation of IT, which has forced many banks to support BYO-device programmes and deliver innovative applications for customers. They are also less constrained by regulatory requirements requiring investment in fine-grained information systems, which is the case for the banks who are preparing for the new Basel III era.Certainly, the rate at which Australia's Big Four banks are forced to innovate and invest - in everything from new core banking platforms to payment applications to telepresence -  to compete with one another seems to be in line with the Jevons paradox. Gartner, however, has questioned how long this cycle can continue, pointing to