IT Spending in Financial Services: A Global Perspective

by Jacob Jegher, January 26, 2011
Industry Trends
Global, Asia-Pacific, EMEA, Latin America, North America

Abstract

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 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 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.”

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

8

Definition of IT Spending

9

Banking

11

 

Snapshot

11

 

North America

13

 

Internal Vs. External Spending

15

 

Europe

22

 

Asia-Pacific

30

Insurance

38

 

Snapshot

38

 

North America

40

 

Europe

47

 

Asia-Pacific

53

Securities & Investments

62

 

Snapshot

62

 

North America

64

 

Europe

74

 

Asia-Pacific

84

The Rest of the World

90

Conclusions

92

Leveraging Celent’s Expertise

93

 

Support for Financial Institutions

93

 

Support for Vendors

93

Related Celent Research

94

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