Financial analyst TowerGroup is forecasting a modest revival in European bank IT spending over the next three years as financial firms turn to technology solutions to enhance operational efficiency and drive down costs.
In 2003, TowerGroup believes that total EU IT spending will decline marginally compared to 2002 due largely to mounting divestitures and outsourcing deals in Germany's flailing banking industry.
Yet in a pan-EU analysis, IT spending is forecast to grow over the next three years, from a total of EUR97.9 billion in 2003 to EUR107.8 billion in 2006.
The research examines spending by EU institutions on three distinct IT segments: maintenance (the cost of maintaining existing IT infrastructures); replacement (the cost for replacing legacy and other systems); and new technology.
Maintenance expenditures are expected to rise from EUR60.4 billion in 2003 to EUR63.8 billion in 2006. Replacement spending is tipped to rise from EUR13.2 in 2003 to EUR14.9 billion in 2006. New technology investments are expected to increase from EUR24.3 billion in 2003 to EUR29.1 billion in 2006.