Financial Institutions to Spend $362 Billion in IT in 2005

TowerGroup identified these as among the top business and technology drivers cutting across all major sectors of the global financial services industry, as part of its series of 2005 Perspectives research reports. Sector-specific highlights covered in the 2005 Perspectives reports include: Banking & Payments: - TowerGroup projects that technology spending by the banking industry in 2005 will represent at least a 4.4% increase over 2004 levels. Of this amount, the bulk of spending (72%) will occurs in the EU and North America - with consumer banking continuing to command the greatest share of overall IT spend across all regions of the world. Insurance: - TowerGroup projects overall IT spending in the US insurance industry to remain relatively flat from 2004 to 2005 - with important differences in the way each business line will direct its resources. 2005 will see a slight increase in total IT spending for property and casualty insurance, reflecting a pent-up demand for new technology, while life and annuity will remain flat as insurers work hard to capitalize on existing investments. Securities & Investments: - As the global securities industry recovers from the after-effects of the technology bubble, it is resuming growth in IT spending at a more measured rate. Between 2001 and 2003, technology spending dropped at a compound annual growth rate (CAGR) of negative-7%. From now through 2008, TowerGroup projects IT spending to rise across the global securities industry at a CAGR of 4%. TowerGroup has published four 2005 Perspectives reports examining business trends and IT spending for 2005: Perspectives Across Financial Services Institutions for 2005: Investing in IT to Sustain Growth (Kopp); Banking and Payments Perspective 2005: Changing the Tires While Driving the Car (Eckenrode); 2005 Insurance Perspectives: Under Scrutiny But Stay the Course; and 2005 Perspectives: Navigating the Securities and Investments Industrys Bermuda Triangle (Hegarty).