Celent estimates that global information technology spending by financial services institutions will reach US$353.3 billion in 2009, representing a decline of 1.3% over 2008. This figure is substantially lower than the 4.5% growth achieved in 2008. Although the next couple of years will be challenging, Celent expects global spending on IT products and services to grow to US$364.5 billion by 2010, a mere 0.9% CAGR from 2008 to 2010.
In a new report, IT Spending in Financial Services: A Global Perspective, Celent 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, Latin America and Africa). The prime focus of the report is to compare and contrast the direction of IT spending trends among financial services institutions.
European and North American financial institutions spend an almost equal amount on IT. Firms in Europe and North America account for 37.7% and 33.5%, respectively, of the global IT investments by financial services institutions. Firms in Asia-Pacific account for 23.3%, and Latin America and Africa account for the remaining 5.6%.
Among all regions, the fastest growth will be seen in financial services institutions in Asia-Pacific, with IT spending increasing at 8.9% in 2008 and a CAGR of 4.1% from 2008 to 2010. Growth will continue to rise in this region, and total spending in Asia-Pacific is expected to reach US$90.3 billion in 2010. Latin America and Africa are expected to grow at a relatively modest rate (3.1%). Spending in this region will grow to US$21.2 billion in 2010.
“Growth rates have dropped across all regions and contributed to lower levels of spending. European and US financial institutions have been hit particularly hard, and challenges in these regions are contributing to growth declines,” says Jacob Jegher, senior analyst in Celent’s banking group and co-author of the report.
“The financial crisis and economic uncertainty have financial institutions tightening their belts. Banks in all regions of the world are experiencing difficult conditions,” he adds.
This 70-page report contains 35 figures and 21 tables. A table of contents is available online.
Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally experienced analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC]. www.celent.com