TheConfederation of British Industry(CBI) has said the slowdown in the financial services
sector means there will be no increase in spending on IT this
finacial year.
In its latest financial services survey, carried out in
conjunction with Pricewaterhousecoopers, the CBI said the credit
squeeze has led to the sharpest fall in business volumes,
employment and profitability in five years.
As a result firms are
holding back IT spending. "Plans for capital investment in the
year ahead are very weak, with plans for spending on IT flat," said
the report.
The trend could continue into 2009 if things do not improve,
according to Ralph Silva, analyst at Towergroup.
"We do not believe that large banks would dare make such a
radical change such as core banking replacement in 2008 because of
economic conditions," he said.
He added that this year's IT spend will go on fixing severe
problems and addressing regulatory issues such as
the single European payments area, the
Markets in Financial Instruments Directive and the
Basel 2 financial regulations.