Most financial services businesses are set to increase their IT expenditure next year in an effort to meet new regulatory requirements, according to market analysts Ovum.16 Dec 2013
Ovum surveyed 200 people involved in the banking industry across the world and found that 67% were intending to spend between 1% and 6% extra next year on IT infrastructure, with the benefits of cloud computing and growth prospects identified as main drivers of the increase.
Ovum said that 40% of financial services companies' IT budgets are currently spent on systems that can help them achieve regulatory compliance, and predicted further growth in IT spending in the market for this purpose. Compliance with the EU's European Market Infrastructure Regulation (EMIR) and the Dodd-Frank Act in the US will be drivers of IT expenditure next year, it said.
Financial regulation expert Monica Gogna of Pinsent Masons, the law firm behind Out-Law.com, said: "It is clear that one of the unintended consequences of an increase in regulation is that financial institutions are now having to bolster their IT systems. As a result, firms are realising that in order to keep up to date with these shifting sands they need to invest in IT products/services more than ever."
"Given the regulatory context in which such outsourcings must occur, firms are under pressure to ensure that any such appointments are in line with the additional regulatory requirements set by the regulator when purchasing such products or when outsourcing their functions to a third party provider," she said.