Financial sector IT volatility seen as likely in 2011

Monday, January 17, 2011

IT spending by Latin America's financial and insurance players will not be cut-and-dry this year, Timothy DeGennaro, an analyst at US firm Forrester Research, told BNamericas.

Roughly 20% of financial and insurance companies will cut back on their technology budgets this year, while on the other hand, more than 50% will be adding at least 5-10% to their IT spending, DeGennaro said.

"There is a lot of variability. [Some companies in] the financial and insurance industries are most likely to increase their IT spending... and [others] are also most likely to be cutting back," he said. "There's a lot of volatility there."

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Roughly 45% of overall Latin American companies are seen increasing IT expenditures in 2011, most of them by 5-10%, while 40% will maintain their technology budgets and 15% will slash spending, DeGennaro said.

Solutions drumming up interest include mobile applications, IT security software and also technology available as a service.

The manufacturing sector is seen as being particularly bullish this year, as Forrester expects companies in that segment to increase technology by more than 10%. On the other hand, public sector movement will be sluggish, the analyst said.

DeGennaro based his remarks on the study Forrsights Budgets and Priorities Tracker Survey, Q4 2010. The study gathered information from more than 2,500 respondents worldwide, including 236 from Latin America - mostly in Brazil and Mexico.

Aside from financial and insurance, government and manufacturing companies, the study also included retail and wholesale; services; media, entertainment and leisure; and utilities and telecommunications.