New York, NY, USA
November 13, 2006
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IT
Spending Trends: A Global Financial Services Review
Report Published by Celent
Celent aggregates financial services IT
spending trends across regions, across the industry, and around the world.
In a new report, IT Spending Trends: A Global Financial Services
Review, analyzes IT spending trends across different industry
verticals (banking, insurance, and securities and investments) and
different regions (North America, Europe, and the Asia-Pacific region) in
addition to an overview of Latin America and Africa. The prime focus of
the report is to compare and contrast to pinpoint and understand the
direction of IT spending among financial services institutions.
Celent estimates that global information technology spending by
financial services institutions stands at US$317.7 billion. This
represents an increase of 8% over 2005. Although the US economic forecast
is relatively upbeat, the growth in IT spending by financial services
firms is expected to curtail starting in 2007. The financial services
community is anticipated to spend US$351.2 billion on global IT products
and services in 2008, or a growth rate of 5.1% per annum.
Financial services institutions in Asia-Pacific are expected to
increase their investments in IT at a significantly faster rate compared
to firms in other parts of the world from 2006 to 2008, a compound annual
growth rate of 11.4%.
“Globally, financial services firms are
heavily dependent on an IT infrastructure that is flexible and reliable.
In the fast-paced world of financial services institutions, it is critical
to seek sustainable operational efficiencies. As the 'new investment
initiatives' tally can tell, financial services institutions worldwide are
keen to spend money to replace old systems, thus reducing IT maintenance
expenses,” states Louise Westerlind,
analyst in the Institutional Securities & Investments group at Celent
and co-author of the report.
Around the globe, financial services firms
have invested heavily in IT for some years. It is starting to pay off and
the growth of spending in maintenance will stabilize somewhat. On the
other hand, the growth in new investments will not taper as extensively.
The financial services institutions
continue to invest briskly in maintenance rather than in new investments.
74.5% of the total IT investments is in maintenance. Nevertheless, firms
are looking at their current IT structure and will invest a larger portion
in new investments in 2007 and 2008. Financial services firms in Asia
Pacific will contribute to the highest regional growth in new IT projects,
which is a compound annual growth rate of 13.0%.The more rapid increase in
new investments is at least partly a result of needed system upgrades.
Frequently, financial institutions are
running systems that are too obsolete, too slow, and inflexible. Systems
like these are impediments to achieving optimum operational efficiency as
well as new product deployment. Slowly, but surely, many financial
services firms, that oftentimes relies on technologies that are nearly
thirty years old, are realizing the competitive advantage of modernizing
their antiquated core systems.
The 60-page report contains 43 charts and
six tables. A table of contents is
available online.
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