Banks to increase IT investments in 2011, report suggests
2010-11-18
As technology advances, financial institutions are increasingly looking toward technology to help them improve customer loyalty and performance while complying with new regulations.

According to a new study by Ovum, a technology data monitoring company, the financial markets sector will be increasing investment in IT services by 4.5 percent in 2011. This is a significant jump compared to 2010, when overall spending on IT vendors rose by only 0.3 percent.

Daniel Mayo, an Ovum analyst, said that the growth will come as a result of FIs looking to improve agility in an uncertain market and a need to invest in compliance and reporting systems.

"The financial markets sector as a whole will be volatile in 2011, but this will not be detrimental to IT spending and will provide significant opportunities for vendors ... [FIs] will also be investing heavily in systems that help them comply with the barrage of new regulations brought in since the global financial crisis," Mayo said.

Additional research by the company suggests that much of this IT investment will be geared toward a greater emphasis on banks' core systems. Financial technology company Finextra writes that to take advantage of the new investment, FIs will need to shed inflexible solutions put in place during a different age.

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