UK financial sector slows online pace as IT cuts bite

UK financial sector slows online pace as IT cuts bite

Financial services firms are clearly embracing the Internet, but at a slower pace than expected following the first cuts in IT expenditure in ten years according to the latest quarterly survey by the Confederation of British Industry and PricewaterhouseCoopers.

A balance of 28 per cent of UK financial services respondents say the total value of Internet business increased in the past three months, compared to 29 per cent in September. Fifty-eight per cent say they can measure the amount of online business with customers, compared to 37 per cent with suppliers.

Just over half of respondents believe the biggest barrier to e-business development is a lack of understanding among customers and suppliers. The speed of the Internet is the second greatest barrier (35%), followed by a lack of security standards (34%).

Sixty-two per cent say there are putting current business activities online, down from 78 per cent in September. Thirty-six per cent have recently launched online brands, compared to 22 per cent in September, with six per cent planning to do so in the near future.

The quarterly survey reveals that general business volumes across the financial services sector have fallen at the fastest pace for nine years, forcing firms to cut costs in a bid to sustain profitability. The study shows IT expenditure has been cut for the first time since September 1992.

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