Financial services IT spending to cross $430 bn globally in 2014

FRAMINGHAM, USA: IDC Financial Insights forecasts worldwide financial services IT spending will top $430 billion in 2014.

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 per cent while Europe and North America remain well below 5 percent.

Capital Markets firms will invest $110 billion in IT in 2014, with North America accounting for almost half of that amount.

Insurance companies will spend $100 billion on IT worldwide in 2014.

Karen Massey, senior analyst, Banking, IDC Financial Insights said, "Bankers continue to be selective with IT initiatives, focusing on those that can deliver value to their clients and the organization, while also satisfying the mandate of reducing costs and improving efficiency. Expect to see projects around risk and compliance, core and infrastructure modernization, customer experience, and security, which are lifting our otherwise tempered forecasts."

Li-May Chew, associate research director, IDC Financial Insights stated, "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 customized offerings, self-serve capabilities and availability of omni-channel touchpoints; and distributors wanting agency support, reliance on technology can only intensify."

Matt Sauer, research manager, Global Securities and Investment Strategies said, "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."