Renewed optimism in the financial services industry will result in increased investment in IT, according to a PricewaterhouseCoopers (PwC) report.
Confidence is growing across most areas of the UK financial sector, according to the quarterly Financial Services Survey conducted alongside the CBI, with capital expenditure on IT set to rise over the next quarter.
Across all areas, 53% of respondents indicated that they intend to invest in IT systems and applications as an enabler for growth.
Headcount is also set to increase, with 2,000 roles new roles added in the last three months and a similar amount in the coming quarter. This means a turn-around compared for the sector, which has seen widespread lay-offs affecting IT staff at many of the large banks.
According to the survey, the goals for bank’s IT investment centre around “regulation, replacement and the desire to reach new customers”, as well as enabling banks to target innovation within their services. Increased expenditure on multichannel mobile and digital services is noted, for example.
The report said: “The resulting investment is likely to cover a wide range of areas including core platforms, payment networks and compliance systems, as well as customer-focused digital and mobile technologies.”
Building societies will also increase IT spending, PwC said, with respondents to replace their legacy systems. One example of this is Nationwide, which overhauled its legacy infrastructure with the introduction of SAP core banking systems.
Within the insurance sector there are expectations that firms will attempt to gain competitive advantage through access to larger data sets. This means capitalising on growing areas of interest such as telematics and data mining, allowing insurers to offer targeted policies to customers by implementing Big Data analytics.
For life insurance companies the main focus of IT investment has switched away from regulation and towards strategies intended to counter the effects of low growth, the report claimed. Despite this, spending on compliance is set to continue as firms react to the newly created 'twin peaks' regulation authorities, in place of the Financial Services Authority (FSA).