Financial firms 'to cut back on IT spending'

News Article - 02 January 2008
Category: Business

Growth of financial services sector technology spending decreased during 2007, according to a study by research firm Celent.

Reported by technology website Computing.co.uk, the report claimed that finance companies worldwide spent $342 billion (£172 billion) on new technology last year, which is a 5.9 per cent increase on 2006's figures.

However, spending grew by 8.7 per cent during 2006, the firm reported.

Financial services in the Asia-Pacific region raised their IT spend by 7.6 per cent, the largest increase worldwide.

Celent recently estimated that IT spending by banks will slow down for the first time in several years. It predicted that the budget will increase by 3.6 per cent during 2008, a 0.5 per cent drop on 2007's 4.1 per cent estimated figure.

The firm attributed the slow down to the impact of the credit crunch and attempts by banks to keep costs under control. It claimed tighter budgets will force IT projects and contract to the back of firm's agendas.

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