IT spending to soar in financial services

IT spending in the financial services industry is expected to grow by the largest amount in five years, a survey has found.

Research from the Confederation of British Industry (CBI)and accountancy firm PricewaterhouseCoopers found firms expect to invest more in IT, land and buildings over the next 12 months and increase their marketing.

In a press statement, Ian McCafferty, the CBI's chief economic adviser, said: "It is pleasing that volumes, profitability and employment are all increasing again in financial services after the recent lull. However it is important to keep this in context.

"The factors behind financial services growth are different to those affecting the rest of the economy where conditions remain tough."

The quarterly survey of 89 companies found 44 per cent of companies will spend more on IT over the next 12 months. Last quarter, that figure was 27 per cent and last year in the same time period it was -28 per cent.

The report said: "IT investment is predicted to grow by the highest balance statistic in five years as the sector expands cost-saving initiatives.

"Regulation is one potential limitation on the horizon; it has climbed slightly as a concern from the low levels of recent quarters as banks become increasingly concerned about the regulatory outlook for consumer lending."

More customers than ever are reported to be using web-based services - one-third of respondents said more than 30 per cent of their customers now use the internet. The perceived barriers to ebusiness were seen as security concerns.