Risk Spending to Outpace Growth in Overall IT Spending
Overall worldwide IT spending in risk technologies and services continues to grow but at a reduced compound annual growth rate (CAGR) of 5.45%, as compared to previous forecasts. Based on new research from IDC Financial Insights, total Risk IT spending is still forecast to exceed $80 billion by 2017.
Several factors contribute to this more conservative forecast rate. First, overall macroeconomic factors have damped forecasts and are contributing to lower overall IT spending across the financial services market. Second, many of the large enterprise-wide risk projects of the 2009-2012 risk-rebuild era, are now largely operational or in a mid-stage of implementation. And third, more attention and budget is clearly being assigned to initiatives that generate business productivity gains, optimise IT infrastructure, and the integration of 3rd platform technologies in front, middle, and back office operations.
"Despite our more conservative forecasts, risk spending is still outpacing growth in overall IT spending, representing between 15% and 17% of overall IT spending on average," says Michael Versace, lead author of the report and IDC Financial Insights global research director.
Versace notes that many spending hot spots remain through all global regions including credit analytics, compliance and ERM in APAC region, fraud, financial crime management, and information security services and software in North America and across European firms, and others.
"At the same time, executives continue to look for risk technology investment value over the long term by establishing a standard for building risk management into all strategic, business IT, and operation IT initiatives, versus being reactive or bolting on initiatives after the fact," adds Versace.
In order to stay competitive and more risk aware, IDC Financial Insights emphasises the importance of strengthening the analytic backbone of the risk function including financial crime management, operational control, cyber security, and critical infrastructure protection.
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