Middle East and North Africa banking and securities companies’ software spending to hit $12.8 billion in 2014
Software spending for the Middle Eastern & North African banking and securities Firms is forecast to grow at 10 percent in 2014, thanks to the expansion strategies of banks and modernizing projects.
IT research and advisory company, Gartner, says that banking and securities companies in the Middle East and North Africa will spend approximately $12.8 billion on IT products and services in 2014, an increase of 2.7 percent over 2013 revenue of nearly $12.5 billion, according to Gartner, Inc. This forecast includes spending by banking organizations on internal IT services (including personnel), IT services, software, data center technologies, devices and telecom services.
Telecom services will be the largest segment in overall IT spending in the banking and securities market at $5.7 billion in 2014. This segment is forecast to increase 1.9 percent compared to 2013.
The MENA region software spending, however, is below worldwide growth, which stood at 4.8 percent on a total revenue of $407.3 billion in 2013 compared to 2012 revenue of $388.5 billion.
Software and IT services are the fastest growing segments with 10 and 6.6 percent increases in 2014, largely due to the expansion strategies of banks across the region and to modernization projects that require much consulting and system integration. Outsourcing is also picking up, as it’s one of the fastest growing segments within IT services.
“Banks in the Middle East are requiring skills that they have scarcity for, so they have started overcoming their traditional apprehension for external outsourcers and have engaged some key players,” said Vittorio D’Orazio, research director at Gartner. “Business process outsourcing (BPO) is expected to grow 9.5 percent in 2014, while IT outsourcing is forecast to increase 7 percent from year.”
“Software spending is being driven by the replacement trend from internally developed software and other older legacies to external packages, especially from the larger banks.” Mr D’Orazio added. “Our regional CIO surveys have shown that banks in the Gulf have a very high percentage of software packages, while in Turkey they tend to have more internally-developed legacies.”
Key trends in the banking industry will be among the discussions at Gartner Symposium/ITxpo 2014 being held in Dubai from April 1-3.