Global Financial Services Firms Show Promise of IT Spending in 2003
Financial Technology Ventures Releases IT Outlook Results
SAN FRANCISCO, CA – CFOs at the world’s leading financial institutions expect to increase information technology (IT) spending in 2003, according to the results of Financial Technology Ventures’ (FTVentures) “IT Outlook” survey, released recently at the San Francisco Venture Capital Forum. The “IT Outlook” survey is conducted semi-annually by FTVentures to uncover information and intelligence that helps shape its investment decisions and industry focus.
Server consolidations and upgrades are the highest IT priorities for these firms, and demand for back-up data centers and storage management continues to remain strong. According to the survey, 20% of the total IT budget at the surveyed institutions is targeted for new capital investment. “Capital expenditure dollars will continue to fund mission-critical infrastructure projects and cost-reduction efforts throughout next year,” said Jim Hale, managing member of FTVentures. “To remain competitive, major financial firms must continue to make ongoing investments in technology.”
Survey results show that although IT budgets are expected to increase, discretionary spending may actually decrease. Of an expected 4% increase in the capital expenditure budget, 41% will be discretionary funding, with the majority going to consulting (55%) and internal operating expenses (20%). “Implementing process savings is important to new project funding, as is achieving a higher yield for more products,” said Hale.
Among IT categories, the following priorities emerged:
- Service upgrades and network management are top IT priorities, and this trend should continue in 2003, with an additional emphasis on equipment upgrades.
- Demand for wireless is expected to remain soft.
- Server consolidations and upgrades are the highest IT priorities.
- Demand for back up data centers and storage management continues to remain strong, but demand for wireless is expected to remain soft.
- Security and productivity- related software dominate the priority lists, and web services are expected to capture IT dollars over the next few years.
Founded in 1998, FTVentures was the first venture capital firm in the U.S. to primarily invest in technologies that benefit the financial services industry. FTVentures now has more than $623 million in total capital under management and and is a leading investor in information technologies. FTVentures invests primarily in mid-to-late stage private companies with developed technologies in three key areas: software and infrastructure solutions providers, electronic commerce enablers and payment sector technologies.
Among FTVentures-backed companies are 7-24 Solutions, Banter, Bluegill Technologies, Corillian, CapitalStream, Caplin Systems, Financial Engines, Managed Objects, Vernier Networks and Verus Financial Management. FTVentures investors are 39 of the world’s leading financial institutions and include AIG, Bank of America Corporation, BNP Paribas, Charles Schwab, Credit Suisse Group, Deutsche Bank, Development Bank of Singapore (DBS), GE Capital, HSBC Holdings, Key Principal Partners, National City Corporation, Skandinaviska Enskilda Banken (SEB), Standard Chartered Bank, US Bancorp and Wells Fargo.
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