The outlook for technology spending in the North American financial services sector is positive, driven by strong revenue growth and a recognition that new and advanced IT and telecom products, services, and solutions can help cope with growing competitive pressures.
New analysis from Frost & Sullivan (enterprisecommunications.frost.com), North American Financial Services Vertical Communication Solutions Market, finds that the financial vertical’s spending on telecom/IT products, services and solutions totaled $113.6 billion in 2006 and estimates to reach $132.7 billion in 2011.
If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants with an overview of the latest analysis of North American Financial Services Vertical Communication Solutions Market, then send an email to Mireya Castilla, Corporate Communications, at mireya.castilla[.]frost.com with your full name, company name, title, telephone number, city, state, country and e-mail address. Upon receipt of the above information, an overview will be sent to you by email.
"With increasing industry consolidation and strong revenue growth, the financial services sector is likely to remain a leading user of telecom and IT products, services and solutions," says Frost & Sullivan Program Manager Imran Khan. "As an early adopter of new and advanced technologies, this segment will experience relatively stable technology spending growth over the next few years."
Growing industry consolidation, with a series of mergers and acquisitions in recent times, is creating bigger, stronger and more diversified participants in the financial services vertical. This augurs well for IT and telecom vendors providing various services and solutions including network integration, technology migration and data transport/WAN connectivity.
Other developments such as the enactment and implementation of the Gramm-Leach-Bliley Act also favorably impact technology spending in the financial services sector. While this Act creates new revenue growth opportunities for various financial institutions, it also drives up levels of competition and creates a need for better customer relationship management processes and 24x7x365 customer support using multiple channels such as wireline and wireless devices.
From a technology provider's perspective, while the financial services vertical presents strong revenue growth opportunities, it is one of the most difficult end-user segments to cater to. This is because of the complex and critical nature of various IT/telecom products and services such as voice services, data transport, or Web hosting. Any problems associated with these products and services could create serious complications for financial institutions. To prevent such situations from arising, providers must ensure strong network and application availability and see that quality-of-service service level agreements are in place.
Competition among IT/telecom vendors in the financial services vertical is also increasing as new participants target this lucrative sector. Large operating incomes of many financial companies allow good budgets for new technology purchase as well as maintenance of existing IT/telecom solutions. Many of the larger institutions also have substantial in-house IT resources that require continued investment in premise-based solutions.
"Taking these factors into consideration, IT/telecom vendors’ success within the financial vertical will depend on their ability to offer converged technology solutions that span multiple platforms such as wireline and wireless services, devices and applications," says Khan. "Additionally, a detailed understanding of this sector’s business priorities and challenges is important to develop customized solutions for the financial vertical."
North American Financial Services Vertical Communication Solutions Market, part of the Enterprise Communications Growth Partnership Services, examines various end-user, technology, competitive and regulatory trends impacting the North American financial services sector. The study highlights adoption trends for various telecom and IT products and analyzes operational priorities and challenges faced by small, medium and large financial firms. Interviews with the press are available.
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Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership service and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies and the investment community by providing comprehensive industry coverage that reflects a unique global perspective, and combines ongoing analysis of markets, technologies, econometrics, and demographics.