Financial services organizations in North America will focus on several items in the first part of 2002 such as disaster recovery, security solutions, and remote access systems to ensure business continuity, a new study from IDC reveals. The study estimated IT spending in banking to reach $56.3 billion by the end of 2001 with IT spending in insurance and other financial services estimated to reach $25.3 billion and $21.4 billion, respectively, by year-end 2001.

In recent months, the insurance industry has been the hardest-hit segment in the finance sector, with reinsurance and insurance companies incurring major losses. "Official estimates show the extent of the damage related to the September 11 attacks to be between $30 billion and $50 billion and we expect further losses as more damage is uncovered in the area around the World Trade Center and as firms file claims for business interruption and liability," says Melissa Dragon, and IDC senior analyst.

IDC expects financial sector organizations in North America to focus on several items in the last quarter of 2001 and the first part of 2002 and a few are highlighted below:

    • Disaster recovery, security solutions, and remote access systems to ensure business continuity
    • Customer relationship management (CRM) to retain profitable customers and identify new revenue-generating opportunities.
    • Outsourcing to improve efficiencies and expedite time to market.
    • Companies are currently focusing on how to leverage IT to answer their most important business challenges.

    "Some financial service institutions will decrease IT budgets, shift investment priorities, or postpone spending for future quarters, " says Dragon. "Companies will need to be selective by approving projects that can ensure cost reduction and prioritizing IT projects that have sound value propositions with measurable returns."

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