UK financial services firms increased IT spending in the first quarter of 2012, a trend they plan to continue over the next year, buoyed by signs of spring-time economic green shoots, according to a CBI/PwC survey.
In their latest quarterly poll of 95 finance firms, the pair found the first rise in optimism in a year, with 32% more respondents feeling upbeat than those identifying as pessimistic.
Of the 95, 44% saw volumes rise in the quarter to March compared to just 21% reporting a fall, giving a balance of +23%. Growth in income more than offset the impact of the sharp increase in total costs, allowing profitability to rise more rapidly than in the previous three quarters (+21%).
With the industry mood slowly but surely improving after a torrid few years and the setback of the euro crisis, spending is on the rise, including on staff, with the number of new employees surprisingly up.
Spending on technology is also growing, with a plus balance of 47% of respondents increasing investment over the last three months, although this is as much down to regulatory needs as industry optimism, especially at banks and building societies.
Ian McCafferty, chief economic adviser, CBI, says: "Financial services sales volumes and income continued to rise this quarter, putting the sector's recovery on a firmer footing...The unexpected rise in employment is a further encouraging sign for the sector. But with the current level of business regarded as below normal, conditions still remain challenging for financial firms."