Optimism amongst Financial Services firms is growing, leading to strong increases in IT spending for 2015 – According to a report from BankingTech.com.
The report draws on data from the latest quarterly CBI/PwC Financial Services Survey.
According to the survey, income from commissions, fees and premiums, and from net interest, investment and trading rose solidly last quarter. This has led to a rise in profits as increasing revenue has offset the rise in costs.
The survey also reports that banks and financial institutions are cutting staff and looking to make their business operations more streamlined. Firms are looking to invest heavily in IT in order to support this streamlining and achieve greater operational efficiency and speed.
Companies have responded to the survey indicating that they plan to utilise new solutions in order to better retain and cross sell to existing customers, rather than put their efforts into acquiring new ones.
Financial services firms have indicated that they are planning to reduce investment in other areas such as land, buildings, vehicles, plant, machinery and marketing over the next financial year. However, most firms are planning strong increases in IT spending.
Key Facts and Statistics
- 59% of financial services firms said they were more optimistic than three months prior.
- 60% of firms said profits increased.
- Income from fees, commissions and premiums increased by 46% over the previous quarter, and is expected to continue growing next quarter.
- Income from net interest, investment or trading income also grew last quarter, by 36%.
- Total operating costs increased, but by a smaller margin (13%), leading to increased profits.
- Employment in financial & insurance activities fell for a second quarter running as firms re-allocate spend to other areas and become more streamlined.
- Inadequate net return on proposed investment was widely cited as the main factor limiting investment in marketing, land, buildings etc. next year.
- Firms still plan to increase their investment in IT (+72%) in the next 12 months, as they target greater efficiency/speed and retaining/cross selling to existing customers.
Growing Investment in Virtual Chief Information Officer Services (VCIO)
There is a growing trend for companies to invest in consulting services rather than in-house staff in order to best identify the technology solutions that fit their business goals and allow them to:
- Grow revenue and profits by using solutions that enable them to tap into existing customer bases and revenue streams more effectively.
- Increase efficiency and speed
- Reduce risk and enhance business continuity
A VCIO is an outsourced Chief Information Officer, who provides the same level of value to your business as a Senior C-Level Executive, and can draw on many years of experience serving dozens of similar companies in the same capacity.
A VCIO is more motivated to perform as they are not a permanent member of staff and therefore must deliver value quickly.
It is important to ensure that any consultant you engage with who is going to have access to your data is ISO 27001 accredited. This accreditation ensures that the consultant’s information security management system has been rigorously audited for security and best practices of handling sensitive data. This helps to ensure that the client stays within FCA Compliance regulations.
To find out more about VCIO services, get in touch today.