Growing finance firms to spend 75% more on IT

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After over 15 years in IT in the financial sector working for some of the uk best and finest growing finance firms and financial institutes, its great to hear in the industry press that the UK financial services companies expect to spend 75% more on IT in 2015 as business volumes grow at the fastest rate since the mid-90s, with keeping ahead of new entrants a major reason to spend more. I have worked in the my previous years in the industry and the now support a number of them too from Accede IT.

IT will see the biggest spending increases of all functions as banks invest to win new customers, launch new products, become more efficient and meet regulatory requirements, according to a report from the Confederation of British Industry (CBI) and PricewaterhouseCoopers (PwC).

The number of people employed is expected to fall by 9%, which could account for some of the extra IT budget. The reports did not specify the size of the firms surveyed, but they included banks, building societies, insurance firms and asset managers.

The CBI and PwC surveyed UK finance firms in December 2014, and it was revealed the businesses expect healthy growth to continue in the first quarter of 2015. Almost half (49%) of financial services firms said they felt more optimistic about the overall business situation compared with three months ago.  PwC UK financial services leader Kevin Burrowes said financial services firm continue to be optimistic about the future.“But we will see them investing more to stay ahead of new entrants, deal with technology challenges, meet increasing regulatory and structural reform costs and deliver better results for customers,” he said.

New banks view IT as a differentiator because modern technologies can cut costs dramatically compared with big traditional banks with legacy systems that are expensive to maintain. Digital technologies, such as mobile, attract consumers.

A recent survey of 2,000 people by banking software supplier Fiserve showed 80% of people would trust a bank if it had the right technology in place. More than half (56%) said a new bank would have an advantage over rivals if its IT was reliable. New entrants to the UK are putting IT at the heart of their strategies.

Related Topics: IT for financial services, IT legislation and regulation, IT governance

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