Financial institutions planning increased IT spending in 2015
A large number of banks and finance firms are planning to increase expenditure on IT in 2015, meaning that it will be the biggest capital outlay that firms will be making this year. A survey conducted by the Confederation of British Industry and PwC has revealed that 75 per cent of them are anticipating having a larger budget for IT in the coming months.
The results gave more details about the finance firms’ plans, with 19 per cent saying they would be upping their marketing budgets, 36 per cent investing in land or buildings and around a third of those surveyed increasing their spending on vehicles and machinery.
The companies which are planning to invest in their IT systems have a number of different goals including reaching new customers more easily, increasing their overall efficiency and expanding their services with new opportunities.
Of those surveyed, building societies proved to be the most ‘IT-friendly’ type of firm, with their responses indicate that not only do they believe that a larger IT budget offers value for money, but also because they recognise the importance of apps and systems to their growth plans.
With 68 per cent of building societies planning to spend more on IT this year than they did last year, this is an increase on both the previous year and the previous quarter. The research also found that 68 per cent of building societies believe that their growth plans will depend on the IT projects on which they are planning to embark.
Building societies were no match for finance houses when it came to actually software and hardware as vital components in any planned expansion. In contrast, banks fall way behind when it comes to investing in applications or systems to facilitate growth, with only 1 per cent believing that they could have a positive effect. The news that a rising number of banks are anticipating a cut in their IT budget has come as somewhat of a surprise, especially when compared to the other financial institutions.
The other sector where there is a planned increase in spending on IT is insurance and the majority of the life insurers who took part in the survey were planning to invest considerably more money in IT. The same was true of securities trading firms as all the respondents that fell into that category were planning a significant investment in technology over the next twelve months, meaning that there is plenty of potential for IT contractors with finance experience to take advantage of the potentially lucrative year ahead.
If you are considering a career as an IT contractor and want some advice and information on your finances, then our guide to contractor tax will help you to get some idea of what you can expect. You can also use our guide to understanding IR35 for information on whether the legislation applies to you.
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