New research has been conducted by the Confederation of British Industry which shows the effect that low trading forecasts has had on the spending plans of IT departments in the financial services industry. A decline in trading forecasts has resulted in the scaling back of planned IT spending.
Only a couple of months ago, the Confederation was reporting an increase in planned IT spending which had not been as positive since August 2008. In November their research showed that 7 per cent of financiers questioned were planning to purchase new IT equipment. The latest research, however, shows a negative response to spending cash on IT services and equipment.
This has been attributed to a predicted slump over the next three months and the after-effects of a very mild upturn over the previous three months which has been described as “disappointing”.
Chief economic adviser at the Confederation of British Industry, Ian McCafferty, commented: “The bounce in UK financial services activity over the past six months is not expected to last as we enter 2010.”
Mr McCafferty continued: “Firms see their business volumes falling back again, with no further improvement in profitability over the next three months.”
The financiers who took part in this latest survey also cited a reduction in the use of IT systems as a means of improving and growing their business, in comparison with the previous quarter, as a reason for the reduced spending plans.
However, on the whole most respondents did state an intention to continue to purchase software and hardware in the long term as part of their continued plan for growth particularly in insurance, banks and finance houses.