IT budgets are set to increase by 6% or more between 2013 and 2014, driving spending to 20 billion pounds (US$32.78 billion) by 2017, according to a survey by Ovum. This is a significant shift from the previous year, when most increased by between 1% and 5%.

 

Ovum’s ICT Enterprise Insights, a survey of senior IT executives, reveals that reducing operating costs and supporting revenue growth are the most important objectives impacting IT investment strategy in 2013. It also states that any IT project will be cautiously evaluated on its return on investment (ROI) and ongoing maintenance costs before approval. Over 50% of respondents to the survey indicate that their IT budgets will rise by 6%.

 

The increasing financial strength of clients is driving investment in the online and mobile delivery segments of the wealth management sector, according to Ovum. New research from the global analyst indicates that IT spending growth in the global wealth management industry will accelerate in 2014 to 4%, up from 3.1% in 2013, before peaking in 2015 at 4.5%.

 

“IT is under the same pressure as other parts of the business in that it needs to control costs while funding investments to meet regulatory and strategic requirements,” says Jaroslaw Knapik, senior analyst, financial services technology, Ovum. “This will lead to low-cost, digital channels and back-office transformation projects.”

 

Wealth managers will also prioritize user experience to improve client trust in the next year. This will require increasing sales and servicing effectiveness, which will drive further front-office IT investments. The focus on controlling operational budgets will remain strong, but wealth managers will increase IT spending on new initiatives. As a result, IT spending is expected to grow in Europe by 2.1% by the end of 2013 and accelerate to 2.9% in 2014. As their economies strengthen, IT spending in Asia-Pacific markets is expected to grow by 3.2% in 2013 and 3.9% in 2014.

 

Knapik concludes: “Wealth managers will devote effort to revenue growth, rather than reducing costs. This will drive further front-office investments, in physical and digital channels, as well as product development.”