Banks want economies of scale for ’03 IT investment, finds new research.

London, February 10, 2003 - A survey of over 130 investment banking professionals conducted in Q4 of 2002 illustrates the growing trend towards software outsourcing to ensure greater economies of scale, with 76 per cent of banks surveyed now opting for tailored off-the-shelf solutions. The 2003 Software Investment Index, sponsored by trading systems vendor Front Capital Systems, a division of SunGard (NYSE: SDS), offers insight into IT buying patterns and attitudes towards a number of key market issues in the sector.

Suggesting an attitudinal sea-change towards packaged solutions, less than one third of those surveyed (24 per cent) believed that in-house systems development should now be a priority for infrastructure development. Also indicative of the trend towards more careful rationing of IT spend is the fact that 69 per cent of survey participants would consider sharing the costs of IT development with partner institutions, despite the potential impact on competitive advantage.

"With so much uncertainty in the market, we wanted to obtain some insight into banks’ views on priority areas for investment and preferred models for software development within reduced budgets," commented Stephen Butcher, head of global operations at Front Capital Systems. "The Index has generated some interesting statistics, not least that the majority of respondents would now prefer to invest in a customised third party solution. This represents a huge step forward for banking software vendors, whose biggest competitor has traditionally been the bank itself. For banks, the removal of stigma around off-the-shelf solutions will encourage greater objectivity towards future application development."

The 2003 Software Investment Index is the first edition of this annual study by Front Capital Systems, which aims to capture collective opinion of senior banking executives towards current and projected IT spend, and decipher the prominent trends in the market. For a copy of the full report, which covers a wide range of other issues not covered within this announcement, please contact:

Rebeca Lohr
Citigate Technology
Direct dial: +44 (020) 7282 2817
Fax: + 44 (020) 7282 8066

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