Financial IT spending to top $150 billion

IT spending in the financial services sector is expected to exceed $150 Billion in North America and Europe by the end of 2001, says Boston-based e-business research organisation AMR Research.

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Financial IT spending to top $150 billion

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AMR used the results as a launch pad for a new financial services e-business practice, designed to help global banks and financial institutions prioritise and maximise return on technology investments.

"Even in the current economic environment financial services firms intend to increase spending on sales and customer management by 5 percent," says John Hagerty, vice president of the practice.

The new division will provide global financial services with insights and information to help manage their business and technology needs, says Hagerty. Key issues that will be addressed include B2B integration, customer intelligence and profitability, and customer business processes such as procurement, bill presentment, and trade reconciliation and payments.

The AMR financial services report, 'What Buyers Want: Customer Expectations for Financial Services in a B2B World' includes survey results of more than 100 firms involved in B2B marketplace initiatives.

With a market projection of $5.7 trillion for B2B e-commerce by 2004, AMR says financial services companies are increasingly being challenged to create an infrastructure to support payment and settlement across private trading exchanges.

The survey indicates a hesitation around e-commerce with nearly 80 percent of current and planned users of trading exchanges expecting to continue using their existing financial services provider to facilitate e-commerce.

Survey results indicate that a basic knowledge of the financial infrastructure is limited to select individuals within a company. Decisions are being made on pervasive marketing pitches rather than the strength of the product and service, although most stressed the importance of utilising several payment vehicles to facilitate trading exchange transactions. Only recently, says AMR, have companies begun to think through the implications of e-commerce on the financial side of a business transaction.



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