IDC Financial Insights forecasts worldwide financial services IT spending will top $430-billion in 2014.
According to new Worldwide IT Spending Guides:
* Banks will account for half of the worldwide total in 2014 with IT spending forecast to be $215-billion;
* Asia/Pacific, Latin America, Middle East and Africa will see growth exceeding 7% while Europe and North America remain well below 5%;
* Capital Markets firms will invest $110-billion in IT in 2014, with North America accounting for almost half of that amount; and
* Insurance companies will spend $100-billion on IT worldwide in 2014.
The Worldwide Banking IT Spending Guide provides a five-year outlook on IT spending by banks, specialised banking institutions, and credit unions, and offers IT vendors key information needed to develop effective market strategies and measure growth areas.
According to Karen Massey, senior analyst: banking at IDC Financial Insights: “Bankers continue to be selective with IT initiatives, focusing on those that can deliver value to their clients and the organisation, while also satisfying the mandate of reducing costs and improving efficiency.
“Expect to see projects around risk and compliance, core and infrastructure modernisation, customer experience, and security, which are lifting our otherwise tempered forecasts.”
Li-May Chew, associate research director at IDC Financial Insights, adds: “As the global economies continue to mend gradually and insurance markets harden, we expect insurers to continue prudently setting aside dollars for technology spending.
“With the necessity for insurers to reinvent and simplify business processes to dramatically reduce cost; their policyholders demanding customised offerings, self-serve capabilities and availability of omni-channel touchpoints; and distributors wanting agency support, reliance on technology can only intensify.
“We project global IT investments rising to $100-billion in 2014, with a 4% compound annual growth rate (CAGR) over the forecast period through 2017.”
According to Matt Sauer, research manager, research manager: global securities and investment strategies at IDC Financial Insights: “As is the case across the financial services industry as a whole, risk and compliance efforts are still dictating which IT projects will be getting the green light at capital markets firms in 2014.
“As the global regulatory environment is still a hotbed of activity, the industry will see substantial investment in areas such as trader surveillance and operational risk projects as well as initiatives to increase automation in a bid to prevent human error and misconduct.”