Worldwide financial services IT spending is set to reach $430 billion (£265 billion) in 2013, according to research from IDC Financial Insights.

As part of a series of biannual updates to worldwide spending forecasts, IDC Financial Insights predicts that investment banking IT will make up more than half of the total financial services spend, at $215 billion (£133 billion) during 2014.

This spending will be focused on investments in a range of projects, such as ensuring compliance to new regulations, as well upgrading legacy systems and security. 

"Bankers continue to be selective with IT initiatives, focusing on those that can deliver value to their clients and the organisation, while also satisfying the mandate of reducing costs and improving efficiency," said Karen Massey, senior analyst for banking at IDC Financial Insights.

"Expect to see projects around risk and compliance, core and infrastructure modernisation, customer experience and security, which are lifting our otherwise tempered forecasts."

Meanwhile, spending by capital market firms will reach $110 billion (£68 billion), and insurance companies will invest $100 billion (£62 billion), with a compound annual growth rate of four percent through to 2017.

"As the global economies continue to mend gradually and insurance markets harden, we expect insurers to continue prudently setting aside dollars for technology spending," said Li-May Chew, associate research director at IDC Financial Insights.

"With the necessity for insurers to reinvent and simplify business processes to dramatically reduce cost, their policyholders demanding customised offerings, self-serve capabilities and availability of omni-channel touchpoints, and distributors wanting agency support, reliance on technology can only intensify."

The increase in financial services spending will be highest in Asia Pacific, Latin America, Middle East and Africa, which will see growth exceeding seven percent, outpacing Europe and North America which will both see growth 'well below' 5%, according to the report.