The UK will be the leading market in Europe for IT spending in the banking and insurance industries until at least 2008, according to forecasts by Datamonitor, which show that spending on technology by banks in the country will hit $23 billion in 2006 alone.
E-banking, Web security and other issues driving IT growth rates in the UK, says Datamonitor.
According to the forecasts, the UK is the prime location in Europe, with an industry-leading $23 billion on IT spending in banking and $16 billion on IT spending in insurance expected this year. Datamonitor also projects that the UK will continue to lead Europe in IT spending in both banking and insurance through at least 2008.
From 2004 through 2008, the compound annual growth rate (CAGR) of IT spending by UK banks is 8.1%, says Datamonitor. Over the same period, IT spending in the UK insurance industry shows a CAGR of 4.1%.
Datamonitor analyst William Conner, says the emergence of e-banking technology is the biggest single factor driving the growth in European banks' IT spending and the online channel will remain the top channel in terms of IT investment growth in 2006.
He says e-banking spending in Western Europe is expected to reach nearly $3 billion by 2008 and the UK is by far the largest European market for this technology, with banks in the country expected to spend $671 million on electronic banking technology by 2008.