IT spending by financial services firms in the UK is expected to grow rapidly over the next 12 months, according to results from a survey conducted by CBI and PwC.
Though technology spending is expected to rise among insurance and capital markets firms, it is banks that will pursue the biggest investment in IT over the next year, the survey found. According to the survey, the main factors driving this investment are increasing speed/efficiency, replacement of old systems, and facilitating the provision of new services.
After IT, the next highest categories of investment financial firms will focus on over the next 12 months include marketing, land and buildings, and vehicles and machinery, according to the survey.
Overall, profitability in the financial services sector continued to grow, but at a more moderate pace compared with the previous quarter, the survey found. Profits are expected to grow at a similar rate over the next three months.
“Banks need to adopt bold new strategies as they face challenges around regaining trust, legacy issues, regulation and technology," said Kevin Burrowes, PwC financial services leader said in a written statement. "Digital must be at the heart of their business as new entrants such as challenger banks, peer-to-peer lending and crowdfunding all have one thing in common – digital platforms which make the most out of big data and really focus on customer needs”