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By Ron Coates, 30 May 2003 16:00

NEWS Most European banks and insurers will spend more money this year on sorting out their IT infrastructure, according to a Datamonitor survey released today. But overall IT spending will remain flat and the financial companies will leave their core systems alone. Almost seven in ten (68 per cent) retail banks and insurers will boost their infrastructure spend, with over a third saying it is their top priority for IT investment, according to the report. Sian Jones, Datamonitor Financial Services Technology analyst, said: "The banks will be concentrating their spending on servers and datacentres, while the insurance companies will be standardising their desktops." "They are looking for cost savings through more efficient systems and lower maintenance costs. The banks have already invested in channel integration and CRM systems, so those projects are well under way and don’t show up in this survey," Jones added. The survey also shows that the most popular strategy for development of core systems was to 'wrap' them to achieve higher levels of data integration. Jones said: "What is interesting is that only about a quarter of retail banks and insurers have a strategy of maintaining core systems indefinitely. It is clear that some form of re-engineering is essential to move towards straight-through processing and streamline business processes."