With markets looking a little shakier than they once did, is the IT party drawing to an end?
Not according to one banking analyst. Dick Bove, at Punk Ziegel & Co., says IT is becoming an increasingly important differentiator.
"Banking is a business that thrives on telecommunications," Bove tells us. "These guys [US banks] have spent millions on IT projects in the past few years - they know they're operating in a highly cyclical business, but the probability of them freaking out and cutting back like in 2001 is low."
Who spends most on IT? Bove singles out Goldman Sachs: "They have more people involved in their IT division than in any other thing they do. It's a big cost, but Goldman has a long-term view of the world. If you get a cyclical downturn in their business, they are not going to cut."
IT research firm Celent estimates financial services firms will spend $317.7bn on IT systems in 2007, and $351.2bn in 2008, with the rate of spending growth moderating over the period.