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IT infrastructure spend priority for European financial services; J2EE/IBM winning budget

30 May 2003  |  4422 views  |  0 IT infrastructure spend priority for European financial services; J2EE/IBM winning budget

Almost seven in ten retail banks and insurers in Western Europe are planning to grow their IT spending on infrastructure in 2003, says Datamonitor, with 34% of institutions identifying this as a number one priority for IT investment.

Of the 150 European financial services firms interviewed for the survey, 68% are pouring money into infrastructure rationalisation projects says Datamonitor analyst Sian Jones.

Says Jones: "There are huge amounts of duplication at all levels of the organisation, meaning that there are major opportunities to create economies of scale through standardisation and rationalisation initiatives."

She says that banks are concentrating on achieving synergies in their servers and datacentres, whereas insurers are focusing on desktop standardisation.

At the application level, J2EE and IBM appear to be winning the lion's share of bank development spend. The survey reveals that 44% of European retail financial services institutions are using J2EE as their primary environment for Web-enabled application development, compared to 17% which primarily use Microsoft .Net. For those respondents using J2EE, IBM's WebSphere application server emerged as the application server platform of choice for 66% of respondents.

At a country level, J2EE's position was particularly strong amongst the UK, French and German institutions, where Web-enabled application development is most advanced. In Spain and Italy, J2EE is somewhat less well established and this was reflected in the greater prevalence of .Net.

However, a significant number of respondents preferred a 'wait and see' approach: 19% said that they used "Both J2EE and .Net", while another 19% were undecided.

Although core systems are also set to be an important area of IT spending - with 47% of firms allocating an increased budget - retail banks and insurers are unlikely to opt for major replacement projects, says Datamonitor, opting instead to re-engineer their legacy systems to achieve higher levels of data integration.

Datamonitor believes that this is mainly due to the extended timeframes implicit in doing replacement projects plus a lack of availability of credible vendor solutions.

Channel integration spend, identified by four in ten of the sample as an area of increased investment, is likely to be targeted towards completing ongoing projects. According to Datamonitor's survey, 57% of retail banks had either already built a middleware platform linking all channels or had integrated some of their channels into a single multichannel delivery platform.

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