Spending on risk management IT is expected to slow, as financial sector budgets remain low and organisations shift investments to new areas.
A report from IDC Financial Insights has shown that expenditure on risk management software, hardware and services for 2013 to 2017 will increase at a slower rate than previously expected, with a compound annual growth rate of 5.45%.
Despite the slowdown in risk IT spending, the market is still forecast to pass $80 billion (£52.9billion) by 2017, according to the Pivot Table: Worldwide IT Spending 2013-2017 – Worldwide Risk IT Spending Guide, 1H13 report.
Part of the reason for the slowing spend on risk management systems is that investment projects aimed at meeting regulations following the 2008 crash are already either operational or midway through implementation.
Other factors include wider economic problems which have led to constrained IT budgets in the financial sector, having a knock-on effect on investment in risk management systems.
Furthermore, available budgets are now being targeted at areas that generate business productivity gains, or optimise IT infrastructure, highlighting that risk management could be becoming less of a priority for financial organisations.
Michael Versace, IDC Financial Insights global research director, said that the level spending still outstrips the level of growth of wider financial sector IT expenditure, with increased investment in certain areas.
"Despite our more conservative forecasts, risk spending is still outpacing growth in overall IT spending, representing between 15% and 17% of overall IT spending on average And many spending hot spots remain through all global regions including credit analytics, compliance and ERM in APAC region, fraud, financial crime management, and information security services and software in North America and across European firms, and others,” Versace said.
“At the same time, executives continue to look for risk technology investment value over the long term by establishing a standard for building risk management into all strategic, business IT, and operation IT initiatives, versus being reactive or bolting on initiatives after the fact."