Financial services firms penny pinch on technology

Want to position yourself next to an organisation with a dynamic attitude towards IT investment in financial services? Best look to insurance or building societies then, because banks, fund managers and securities firms are all looking to curb spending.

Across financial services, appetite for IT spending is expected to shrink over the next 12 months, according to the latest quarterly review from the CBI/PricewaterhouseCoopers. Asked whether they'd spend more cash on technology over the next year, the balance of respondents in the survey was -6%.

This is the third consecutive negative response, after -1% in Q1 and -4% in Q2, and it's a massive drop from the highs of +55% in the final quarter of last year.

Securities trading seems to be leading the way with technology belt-tightening, with a balance of -35% of respondents predicting an increase in IT spend, down from +25% as recently as the first quarter of this year. Similarly, in banking the balance was -24%, and fund management entered negative territory for the first time in over a year with -4%.

In contrast, general insurance and building societies, which are still replacing archaic legacy systems, are looking to increase IT spending, with the balance of respondents in the survey coming in at +38% and +50%, respectively.

The gloomy predictions are in line with recent research by IT consultancy Forrester, which surveyed senior IT managers in banks in the US and Europe. Nearly half, 49%, of respondents said they had already slashed IT budgets