The UK's financial services sector will cut back on technology spending over the next year as firms move to tighten their belts during the economic turmoil, according to a survey by the Confederation of British Industry (CBI) and PricewaterhouseCoopers (PwC).
The survey of 100 representatives from financial institutions found that firms are set to slash IT spending in the coming year. When asked if they'd spend more cash on technology over the next year, the balance of respondents in the survey was -6%.
Securities trading is most likely to see a fall in spending, with a balance of -35% predicting more technology spending over the next year, a swing from +53% in December.
Banking respondents were only marginally more optimistic, with a balance of -24% compared to +49% in December.
But other areas of the finance world were far more positive about the prospects for increased IT spending. Insurance broker lead the optimism with a positive balance of 38%, closely followed by building societies on +34% and general insurance on +33%.
There were less conclusive results from other sectors, with life insurance firms eliciting a negative response of minus six per cent, fund management minus four per cent and financial houses coming up with zero.
The responses to technology spending were in line with a generally gloomy picture. A balance of 59% for all sectors said they are less optimistic about the overall business situation in the financial services sector than they were in June.
Meanwhile, numbers employed in the sector fell during the quarter - a balance of -16% - and this is expected to rise sharply over the three months ahead, with a balance of -44%.
John Cridland, deputy director-general, CBI, says: "One year after the credit crunch first took hold, business volumes and profitability in the financial sector have taken their hardest hammering yet. Firms have become more fearful about the extent and length of the credit crunch, and they are now looking to cut more jobs and scale back investment."