IT Spending in Financial Services: A Global Perspective

by Jacob Jegher, January 14, 2010
Industry Trends
Global, Asia-Pacific, EMEA, Latin America, North America

Abstract

Global information technology spending by financial services institutions is expected to reach US$357.4 billion in 2010, an increase of 2.9% over 2009. This figure is substantially higher than the 2.5% decline in growth experienced in 2009. Although 2010 will be challenging, global spending on IT products and services should grow to US$393.5 billion by 2012, a 4.9% CAGR from 2010 to 2012.

In this 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, 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 currently spend an almost equal amount on IT. Firms in Europe and North America account for 36% and 33.1%, respectively, of the global IT investments by financial services institutions. Firms in Asia-Pacific account for 25.2%, and Latin America and Africa account for the remaining 5.7%.

Among all regions, the fastest growth will be seen in financial services institutions in Asia-Pacific, with IT spending increasing at 5.1% in 2010 and a CAGR of 6.2% from 2010 to 2012. Growth will continue to rise in this region, and total spending in Asia-Pacific is expected to reach US$101.7 billion in 2012. Latin America and Africa are expected to grow at a relatively modest rate (3%). Spending in this region will grow to US$20.4 billion in 2010.
 
"After a difficult 2009, growth rates are starting to climb across all regions,” says Jacob Jegher, senior analyst with Celent's Banking Group and coauthor of the report. “2010 has the potential to be the start of a turnaround, but there is still plenty of uncertainty in the industry and we are not completely out of the woods."
 
"European and US financial institutions have been hit particularly hard, and many of these challenges will continue in 2010,” he adds.

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 based 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 a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

Introduction

7

Definition of IT Spending

8

Banking

10

 

Snapshot

10

 

North America

12

 

Internal Vs. External Spending

14

 

Europe

23

 

Asia-Pacific

29

Insurance

36

 

Snapshot

36

 

North America

38

 

Europe

44

 

Asia-Pacific

48

Securities and Investments

55

 

Snapshot

55

 

North America

58

 

Europe

65

 

Asia-Pacific

71

The Rest of the World

77

Conclusion

78

Leveraging Celent’s Expertise

79

 

Support for Financial Institutions

79

 

Support for Vendors

79

Related Celent Research

80

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