Information Technology

Information technology (IT) has transformed the financial services industry, making available many products and services that would have otherwise been impossible to offer. These range from asset-backed securities and automated teller machines (ATMs), introduced in the 1970s and 1980s, to more recent innovations such as online banking. At the same time, IT has improved efficiency and reduced labor costs.

The technology explosion has also radically changed the ways consumers shop for financial products, with many Americans now using the Internet for banking services and for researching and buying financial products. In 2012 about 85 percent of U.S. adults used the Internet, according to research by the Pew Research Center’s Internet & American Life Project. About 61 percent of adults did some online banking in 2011, according to a report by the project.

ADULT INTERNET USE BY AGE AND INCOME, 2012

  Percent who use Internet
All adults 85%
Age  
     18 to 29 96
     30 to 49 93
     50 to 64 85
     65 and over 58
Household income  
     Less than $30,000 75
     $30,000 to $49,999 90
     $50,000 to $74,999 93
     $75,000 and over 99
Education  
     No high school diploma 61
     High school graduate 80
     Some college 94
     College  97

Source: The Pew Research Center’s Internet & American Life Project’s Tracking Survey, July 16 - August 7, 2012.

IT SPENDING

A 2013 survey by Celent projects that information technology spending by the North American insurance industry will increase from $51.1 billion in 2013 to $58.4 billion in 2015. Information spending by North American banks is expected to increase from $56.9 billion to $61.9 billion during the same period.

IT SPENDING BY THE NORTH AMERICAN INSURANCE INDUSTRY, 2011-2015 (1)

($ billions)

  2011 2012 2013 2014 2015 Total growth,
2011-2015
Life/health $19.5 $19.5 $20.2 $22.6 $23.7 21.5%
Property/casualty 25.8 29.1 30.9 32.3 34.7 34.5
Total $45.3 $48.6 $51.1 $54.9 $58.4 28.9%

(1) Data for 2013 to 2015 are projected.

Source: Celent.

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IT SPENDING BY THE GLOBAL BANKING INDUSTRY, 2011-2015 (1)

($ billions)

  2011 2012 2013 2014 2015 Total growth,
2011-2015
North America $53.4 $54.7 $56.9 $59.4 $61.9 15.9%
Europe 59.1 59.2 59.5 59.7 59.9 1.4
Asia Pacific 56.0 59.4 62.8 66.5 70.2 25.4

(1) Data for 2013 to 2015 are projected.

Source: Celent.

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IT SPENDING BY INDUSTRY AND REGION, 2013 AND 2015 (1)