Financial institutions expect more cuts to IT budgets and staff in 2003. This is the key finding of Finextra's Financial Technology Strategies report and survey, which analyses banks' and financial institutions' strategic business directions, technology goals and spending plans for the year ahead.
The survey of over 70 of the world's leading banks finds cost reduction is the main factor driving business and technology strategies as financial institutions strive to make their existing processes more efficient.
This is good news for the back office and risk management and compliance functions, which are seen to deliver a measurable payback to bottomline business processes.
Straight-through processing continues to command attention for the same reasons, but most of the budget will be directed to achieving internal efficiencies. Spending on industry-wide interoperability projects, such as virtual matching utilities, and improvements to buy-sell-side communications assumes a lower profile.
Continuing the cost reduction theme, IT staff numbers are expected to decline further in 2003 as a consequence of fewer internal projects and a move towards more tactical IT outsourcing. Almost one third of institutions are expecting a decrease in the number of internal IT staff, compared with less than 20 per cent expecting an increase.
Despite the gloom, survey respondents show a positive appreciation of the value of technology in helping to alleviate the worst aspects of the economic downturn and contribute to lowering costs.
The full report, Financial Technology Strategies 2003, is available free of charge to employees of banks and financial institutions.
See our reports and surveys page for further details.