Bladewatch.com

Finextra

Financial Insights is predicting an overall reduction in IT spending for North American banking in 2009, and negative growth for five years afterwards.

Some of the drivers for the lower overall spend in the forecast are contraction of the industry, increased embrace of outsourcing and offshoring, continued data centre consolidation, and pressure on bank profits.

The analyst house says banks interviewed in October and November report halts in 2008 spending and smaller budgets for 2009.

Expenses will be lowered by reducing IT staff, continuing virtualisation projects, delaying planned hardware purchases, and stalling projects already underway.

We’ll have to see how things develop. Businesses need to save money, to be more efficient, for IT to deliver more value at an overall lower cost. Interestingly, to really achieve this long term you need to invest in your infrastructure, simply refreshing your server estate can reduce your hardware support costs, your energy requirements and reduce downtime through component failures. In the short term we can sweat out the assets, keep the legacy servers running for the time being, long term though, we reach the top of the bell curve where the capital savings are less than the savings you could achieve operationally. Within the finance sector in particularly, we also have the results of the several mergers and acquistions, where to reduce costs and complete business integration earn more revenue, we need to insource and integrate systems and business lines so we can get the savings and oppor

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