According to research IT spending will grow at the expense of other areas such as marketing, as businesses try to sell more to existing customers, while also aiming for improved efficiency.
Research from PwC and the Confederation of British Industry found that 59% of firms in the financial services sector are more optimistic than three months ago. 31% reported increased business volumes and 37% of firms expect business volumes to rise over the next three months.
According to the research, firms are focusing on increasing their spending in IT and lowering it in other areas such as marketing.
The report said: “Financial services firms expect to reduce investment in land and buildings, vehicles, plant and machinery, and marketing over the next 12 months. However, firms in most sectors continue to plan strong increases in IT spending.”
While marketing spend fell by 10%, IT investment is expected to increase by 72% over the next 12 months.
CBI director of economics Rain Newton-Smith said: “Firms plan to cut their marketing spend and increase their IT investment over the next year, as they focus on increasing efficiency and selling to existing customers, rather than trying to win new business.”
Banks will basically have to invest in wider areas of IT.
The financial services leader from PwC UK, Kevin Burrowes, said the spending priorities for banks this year will focus on improving IT infrastructure and cyber security.
He added: “Growth is seen to come from cross-selling to existing customers and attracting new domestic customers.
“Banks are also building new digital platforms to remain competitive and respond to changing customer needs.”
Research from Celent revealed that European banks will spend £46bn on IT in 2017.