Global information technology spending by financial services institutions is expected to reach US$363.8 billion in 2011, an increase of 3.7% over 2010. This figure is substantially higher than the lackluster 2.5% growth increase experienced in 2010. Growth rates are starting to climb across most regions and IT products and services should grow to US$393 billion by 2013, a 3.9% CAGR from 2011 to 2013.
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, the Asia-Pacific region, Latin America, and Africa).
European and North American financial institutions currently spend an almost equal amount on IT. Firms in North America and Europe account for 34.2% and 33.6%, respectively, of the global IT investments by financial services institutions. Firms in Asia-Pacific account for 26.4%, and Latin America and Africa account for the remaining 5.8%.
Among all regions, the fastest growth will be seen in financial services institutions in Asia-Pacific, with IT spending increasing at 6.2% in 2011 and a CAGR of 6.2% from 2011 to 2013. Growth will continue to rise in this region, and total spending in Asia-Pacific is expected to reach US$108.2 billion in 2013. North America will experience climbing growth rates through 2012 while Europe will struggle. Latin America and Africa are expected to grow at a relatively modest rate (3.7%). Spending in this region will grow to US$21.2 billion in 2011.
“Growth rates are starting to climb across most regions. We are not completely out of the woods, but the good news is that the turnaround has begun,” says Jacob Jegher, Senior Analyst with Celent's Banking Group and coauthor of the report. “European institutions are still being hit particularly hard, and many of these challenges will continue in 2011. The good news is that overall growth projections are indicating a positive trend.”
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