IT is set to feel the brunt of hard times hitting the financial services industry--according to new research, tech budgets in the global retail banking sector could be slashed by billions.
The picture is especially bleak in the United Kingdom, where banking IT budgets will fall by 7 percent year on year in 2009, compared to a fall of 2 percent worldwide, a report by Datamonitor predicts.
The fall could result in US$40 billion being wiped off projected IT budgets over the next five years, according to the research company.
While the first green shoots are expected to appear for banking IT at some point in 2010, Datamonitor expects spending to remain flat until 2012.
Some areas of spending will defy financial services' spending crunch: in-branch tech will remain resilient as banks attempt to maintain service levels following job cuts.
Outsourcing and hardware should also bear up, according to the report.
"IT outsourcing spend will be more resilient in the short term, as banks are tied to longer term deals. In the medium term, there will also be a pick-up in spend as banks adopt broader sourcing strategies, with IT outsourcing as part of business process outsourcing (BPO) deals likely to be a particular growth driver," it said.
Jo Best of Silicon.com reported from London.
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