Security and selling systems to other firms will replace ebusiness as long-term IT priorities for finance companies this year, according to analysts.
The annual list of the top 10 strategic IT initiatives for the sector by Meridien Research has revealed that difficult economic conditions will force companies to concentrate on internal IT development at the expense of many ebusiness projects.
Meridien analyst Bill Bradway said: "The largest institutions are trying to figure out which initiatives warrant termination or a slower rate of implementation, especially where results are a bit off expectations.
"We expect that institutions will focus more attention on internal development needs, pulling away from, or diminishing their involvement with, industry consortiums and external initiatives."
The main projects to disappear from this year's list are e-procurement and e-marketplaces. This is because significant infrastructure requirements needed to support electronic transactional systems combined with low trading volumes in exchanges made the model uneconomical, said Bradway.
"Most top management at financial institutions realise that the race to the internet was run inefficiently by much of the industry. We predict a more controlled pace of new investment for e-financial services," he explained.
Instead, financial services organisations will be focusing IT spend on credit risk management software, customer relationship management, outsourcing, security and selling on in-house developed systems.
"Providing a platform for other market participants will leverage the value of the technology and perhaps provide a boost to the institution's market capitalisation," said Bradway.
Meridien predicted that global IT spending on strategic wholesale initiatives by financial services companies in 2002 will remain flat at $26.2bn, with Europe accounting for $10.5bn of that figure.
The research company said that overall worldwide IT spend for both retail and wholesale financial services will be $229.8bn in 2002, a four per cent growth rate compared to almost nine per cent last year. The figure for European financial services companies is $80bn.
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