Europe drags down bank IT spending - Celent

Europe drags down bank IT spending - Celent

Bank IT spending in North America, Europe and Asia Pacific will hit US$173.3 billion this year, a modest 2.8% rise on 2011, according to research house Celent.

Asia Pacific will see by far the strongest growth, predicts Celent, with a six per cent rise in 2012 to $59.4 billion before reaching $62.3 billion in 2013.

The outlook is far less encouraging for North American banks, with growth a mere 2.4% in 2012 to $54.7 billion before a slight pick-up the following year to 2.9% growth and $56.3 billion.

In this region Celent identifies corporate banking, compliance, regulatory, and security spending as on the rise. However, "it's not all fine and dandy" and retail banking IT spending in the US is being stifled, new investment money is limited, and maintenance outlay is still tying up budgets.

The situation in Europe is even more worrying; IT spending is expected to grow a paltry 0.3% in 2012 to $59.2 billion and 0.4% to $59.5 billion the following year.

Jacob Jegher, senior analyst, banking group, Celent, says: "From an IT spending perspective, the next couple of years are going to be rocky. The good news is that a slight turnaround is in sight. When examining the sum of the three regions, IT spending is expected to grow by 3.1% in 2013 and 3.4% in 2014."

The Celent figures contrast with a recent report from another research house, Ovum which focused specifically on retail banking IT spending. Ovum thinks Asia Pacific will spend $10.2 billion in 2012, 8.3% up on the previous year while, in contrast, Western Europe will spend $44 billion, just on retail IT.

Meanwhile, another analyst, Gartner has revised downward its outlook for 2012 global IT spending growth to 3.7% but that still leaves total spending predicted to hit $3.8 trillion.

Comments: (1)

Bob Lyddon
Bob Lyddon - Lyddon Consulting Services - Thames Ditton 23 January, 2012, 16:45Be the first to give this comment the thumbs up 0 likes

The figures quoted for Europe reflect the phase of the business cycle so they should not be a surprise, but at the same time they highlight the gap between current budgets and plans, and the IT spend that might be required to implement the SEPA Migration End Date in February 2014. Paul Styles of ACI recently, in these pages, drew attention to the current lack of focus and activity on SEPA, and these figures would seem to confirm that.

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