Report: IT Spending Accelerating At Financial InstitutionsReport: IT Spending Accelerating At Financial Institutions

IT spending by North American capital market organizations is showing signs of acceleration, IDC reported Monday, after surveying more than 200 financial institutions. The market research firm's Financial Insights unit said capital markets firms are preparing to spend $36 billion on technology this year.

Financial Insights noted that it is predicting financial institutions will spend at a compound annual growth rate (CAGR) of 5 percent--slightly higher than its 4.5 percent CAGR estimate for the financial services industry itself.

"We're seeing the initiation of some larger, more strategic projects aimed at some measure of transformation around the integration of solutions and data architectures," said Jin-Chul (Gene) Kim, senior analyst in the firm's Capital Markets Group, in a statement.

"Integration that impacts market presence and client-facing delivery, and ultimately revenues and margin, will change the way that capital markets firms look not only at their technology but also at their business processes. These are big projects and will certainly influence spending levels over the coming 12-24 months."

Financial Insights said its estimates included not only internal IT staff spending, but also certain spending at banks, broker/dealers, exchanges, and insurance companies.