UK banks shave IT budgets

Banks in the UK will be harder hit than those in North America by a downturn in global financers' tech spending that will thin their IT budgets over the next five years by $40 billion, writes Contractor UK.

Delivering the bleak outlook, analysts at Datamonitor said banks in Europe and the US will spend 2009 “heavily scrutinising” their IT budgets as many remain in “survival mode”.

The reason being that drivers behind the crisis, including debt manageability, asset prices and confidence in the banking system, persist, despite signs of dissipating in October.

In a study led by doctors Chris Storey and Paul Harborne of Cass Business School, supported by ea Consulting Group, 25 senior managers across 24 UK firms, including nearly all major UK retail banks, were interviewed, states Banking Technology.

It was found that financial services firms are being held back and not realising strategic level advantages due to the way in which project portfolios are being managed.

In many cases it was found that the IT department was the only area within a business that had complete visibility of the project portfolio due to the heavy requirement for technology in almost all project tasks.

In yet another shake-out of the Melbourne banking scene, Australia and New Zealand Banking Group today confirmed it would send around 500 IT and back office jobs to India by year's end, says ZDNet Australia.

"In 2008, the size of the operation in Bangalore grew by around 500 people and it is reasonable to expect there will be similar growth in 2009," a spokesperson said in a statement.

The majority of cuts are likely to come from its Melbourne headquarters.