European financial services firms will spend £67.6bn on technology this year and £72.1bn next year, but rates of growth are falling as a knock on effect of the US sub-prime mortgage crisis, according to a study from research firm Celnet.
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The growth in spending on IT among financial institutions across the globe was 5.9% higher in 2007 compared with 2006, at £172.3bn, but it was significantly lower than the increase seen in 2006 which was 8.7%.
"Growth rates have dropped across all regions, contributing to this lower total," said Jacob Jegher, senior analyst in Celent's banking group. "US financial institutions have been hit particularly hard and challenges in this region are contributing to growth declines. The credit crunch and looming economic uncertainty have North American financial institutions tightening their belts. Ripples from the US sub-prime crisis are likely to have a dampening effect on other regions as well."