Financial services firms across the world will collectively spend $353.3bn on IT this year,which is 1.3% less than last year as companies reduce capital expenditure amid economic uncertainty, according to analyst firm Celent.
This compares to a 4.5% increase in 2008 compared to 2007.
European and North American financial institutions currently spend an almost equal amount on IT with 33.5% and 37.7% of the total respectively according to the IT Spending in Financial Services: A Global Perspective report from Celent.
"Growth rates have dropped across all regions and contributed to lower levels of spending. European and US financial institutions have been hit particularly hard, and challenges in these regions are contributing to growth declines," says Jacob Jegher, analyst at Celent.
"The financial crisis and economic uncertainty have financial institutions tightening their belts. Banks in all regions of the world are experiencing difficult conditions," he adds.
In the investment banking sector Celent said IT spending in Europe will decrease 5% to $24.8bn in 2009, due to the global financial crisis, though strategic IT initiatives and market structure changes will cause growth to accelerate in 2010.