Irvine, Calif. – Financial service organizations may be in a position to benefit from rising interest rates, but it does not seem to be translating into strong increases in IT spending. Current survey responses show that companies in this sector expect to increase IT operational spending and headcount at a pace that is about average, according to the annual Computer Economics IT spending and staffing benchmarks study.
The Irvine, Calif.-based IT research firm found that financial service firms plan to increase IT operational budgets by a modest 2.1% this year, an increase that is in line with the 2.3% rise forecast for the composite sample. About 45% of the financial service organizations, including banks, lenders, and insurance companies, are increasing headcount. That is also about average across all sectors.
IT operational spending makes up the lion’s share of IT spending by organizations because it includes salaries and benefits for IT workers. Other operational cost components include data and telecom service, outsourced services, depreciation, software maintenance, and leased equipment.
Meanwhile, IT capital budgets are declining 6.9% from the previous year at the median, a finding that is well below the composite trend. Capital spending plans tend to be far more variable than IT operational spending across sectors, however, and this outlook could change as the year progresses.
“We are somewhat surprised by the muted plans for IT spending in this sector. While the outlook for operational spending is average, the outlook for capital spending seems to lack conviction,” said Frank Scavo, president of Computer Economics. “Financial services organizations are being cautious in their hiring and spending on capital projects.”
About the Study
The Computer Economics IT Spending and Staffing Benchmarks study, now in its 24th year of publication, provides key metrics to assist organizations in the financial and strategic management of information technology. Each year, we conduct an in-depth survey of IT executives in the U.S. and Canada to gather detailed metrics concerning their IT spending and staffing levels, use of outsourcing, and adoption of IT management best practices. The 2013/2014 study is based on a survey of more than 200 IT executives conducted in the first half of 2013. It provides composite statistics of IT spending and staffing data, a segmentation of the same statistics by organization size, and individual chapters for 20 sectors and subsectors. Additional findings along with a description of the study’s content, design, demographics, and methodology can be found in the executive summary.