Financial IT spending at a trickle, says analyst

Despite the global exchange market undergoing massive change, total IT spending is only at a trickle, according to financial research firm TowerGroup.

It said with increased trading, demutualisation, widening regulatory requirements and shifting market structures, high growth in IT spending would be expected. But that is not the case and TowerGroup estimates exchanges globally spent a relatively modest £1.43bn on IT in 2006.

TowerGroup expects that this spending will only grow by 3% through to 2009. It says spending will be 4% this year, but will then reduce to between 2% and 3% from 2008 to 2009.

Spending in the US is showing the smallest growth, with Europe growing moderately and Asia growing the fastest, said TowerGroup.

As CIOs begin aligning IT strategy with corporate goals, pressures on IT costs are building, said TowerGroup. Of all the public exchanges, those in the US are currently under the greatest pressure to reduce costs as they go electronic, in order to get their IT expense/revenue ratio in line with that of other financial firms and European counterparts.

TowerGroup's IT spending estimates

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