Worldwide, financial services IT spending will surpass $430 billion in 2014, according to the latest IDC Financial Insights forecasts.
Banking will account for half of the worldwide total in 2014 with IT spending forecast to be $215 billion, the report said.
Asia/Pacific, Latin America, Middle East and Africa will see growth exceeding 7 percent while Europe and North America remain well below 5 percent, according to the report.
Capital Markets firms will invest $110 billion in IT in 2014, with North America accounting for almost half of that amount. Insurance companies will spend $100 billion on IT worldwide in 2014.
“Bankers continue to be selective with IT initiatives, focusing on those that can deliver value to their clients and the organization, while also satisfying the mandate of reducing costs and improving efficiency,” said Karen Massey, senior analyst, Banking, IDC Financial Insights.
“Expect to see projects around risk and compliance, core and infrastructure modernization, customer experience, and security, which are lifting our otherwise tempered forecasts,” Massey added.
As the global economies continue to mend gradually and insurance markets harden, insurers will continue prudently setting aside dollars for technology spending.
With the necessity for insurers to reinvent and simplify business processes to dramatically reduce cost; their policyholders demanding customized offerings, self-serve capabilities and availability of omni-channel touchpoints; and distributors wanting agency support, reliance on technology can only intensify.
Analysts project global IT investments will rise to $100 billion in 2014, with a 4.0 percent compound annual growth rate (CAGR) over the forecast period through 2017.
According to Matt Sauer, research manager, Global Securities and Investment Strategies, risk and compliance efforts are still dictating which IT projects will be getting the green light at capital markets firms in 2014.
As the global regulatory environment is still a hotbed of activity, the industry will see substantial investment in areas such as trader surveillance and operational risk projects as well as initiatives to increase automation in a bid to prevent human error and misconduct, the report said.