A Gartner report released today estimates that globally, securities firms will spend $136 billion on IT this year. In North America, the securities-related IT spend is expected to be $55.3 billion. Broken down, the largest chunk of that U.S. investment will be spent on professional services ($17 billion) and telecom services ($15 billion). Next are internal services ($10 billion), hardware ($4.6 billion) and software ($4.5 billion), followed by product support ($3 billion) and telecom equipment ($1.2 billion).
The Gartner report, "Cost Cutting for IT in 2008 Must Deal With a Potential Economic Downturn at Banks and Investment Services Firms," strongly urges financial services firms to not mothball discretionary IT projects, as many are surely tempted to do in this climate. "IT is the driving force behind banks' processes," writes the report's author, Peter Redshaw. "IT is also a way for many banks to differentiate themselves, as they have no tangible products in which engineering or design can meet that need."