MENA banking sector on pace to spend $13.2bn on IT this year
Vertical's IT spend to increase 2.7% over 2013, according to Gartner
Banking and securities companies in the MENA region will spend approximately $13.2bn on IT products and services in 2014, an increase of 2.7% over 2013, according to the latest figures from Gartner.
The latest forecast includes spending by banking organisations on internal IT services, IT services, software, data centre technologies, devices and telecom services, Gartner said.
The research house predicted that telecom services will be the largest segment in overall IT spending in the banking market, with MENA firms set to spend $5.7bn on telecoms in 2014 - an increase of 0.6% compared to 2013, Gartner said.
Meanwhile, software and IT services will be the fastest-growing segments, with growth expected to reach 9.2% and 8.4% respectively in 2014. This would largely be down to the expansion strategies of banks across the region, and the modernisation and replacement projects banks are putting into their back-office systems, Gartner said.
"Software spending is being driven by the replacement trend of back-office systems, especially from the larger banks, while newer banks are being created from the scratch which opens a lot of new opportunities for IT vendors, " said Vittorio D'Orazio, research director at Gartner.
The research house added that outsourcing is also picking up among banking firms in the MENA region.
"The outsourcing of IT, as well as business processes, have become more common across some Gulf countries. This market is still far from mature, but it is already a good start and miles ahead compared to a decade ago," D'Orazio said.
"Business process outsourcing (BPO) is expected to have a strong growth at 12.6% in 2014, while IT outsourcing is forecast to increase 8.5% from last year.