FRAMINGHAM, MA – Investment in IT is beginning to show signs of life, a new study found, based on a survey of over 200 financial institutions.

Financial Insights, an IDC company, estimates that North American capital markets firms are planning to spend a total of $36 billion on technology in 2005 based on current budgets and plans. The firm forecast 5% growth in IT capital buys for the industry.

The research firm includes in its estimate internal IT staff spending, external spending at banks, broker and dealers, exchanges and insurance companies.

Average technology spending by sell-side firms remains at roughly double that of buy-side firms, the firm said. . Financial Insights said a factor to watch over the coming 12 months will be the effect that changing soft dollar policies will have on the relative spending mix.

"[W]e’re seeing the initiation of some larger, more strategic projects aimed at some measure of transformation around the integration of solutions and data architectures," said Jin-Chul (Gene) Kim, senior analyst. "Integration that impacts market presence and client-facing delivery, and ultimately revenues and margin, will change the way that capital markets firms look not only at their technology but also at their business processes. These are big projects and will certainly influence spend levels over the coming 12 to 24 months."

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