Building societies to "invest heavily" in IT
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New report from the CBI and PricewaterhouseCoopers finds that building societies plan to invest in technology, but IT spending by banks "cannot last"
Building societies are poised to invest heavily in IT in order to retain customers, according to a survey by the Confederation of British Industry and PricewaterhouseCoopers.
The survey found profit to be growing among the UK's building societies during the most recent financial quarter, while "forecasts for business volumes and the value of revenues are also surprisingly positive".
That means that as well as hiring, "the [building society] sector is also planning to invest heavily in IT systems and applications to retain its existing customers”, according to PwC's banking leader Andrew Gray.
While profit and revenues also grew among conventional banks, looming regulatory changes have knocked their confidence, the survey found. This means that cost containtment initiatives are likely to return, PwC predicted.
"Despite a short-term increase in operating costs, as banks continue to invest in IT efficiencies and marketing to protect their market share, this is unlikely to last," said Gray.
The financial services sector as a whole was not optimistic for the near future. "After a torrid couple of months on global financial markets, the mood has clearly darkened," said Ian MacCafferty, the CBI's chief economic advisor. "Uncertainty about future demand, worries about the global recovery and shifting regulatory sands are weighing on sentiment."
