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IT spend by Middle East and North Africa banking and securities firms to grow to $12.4b

Region is not dampened by uncertainty in the global scenario, expert says

Image Credit: Supplied
Moutusi Sau
Gulf News

Dubai: Spending by banking and securities firms on information technology in the Middle East and North Africa (Mena) is expected to grow 3.5 per cent increase to $12.4 billion this year, said an industry expert.

Moutusi Sau, principal research analyst at Gartner, told Gulf News that Mena is not very immune to the uncertainty in the global scenario, especially in Europe and North America.

“We see Mena a little bit of growth and are a bit bullish on the region compared to the previous year. Most of the governments are coming out with a backup plan to move away from sole reliance on oil sector, especially the Gulf Cooperation Council countries,” she said.

She said that growth rates in the region is little higher than some of the regions we track, emerging Asia and Asia Pacific is the fastest growing regions. Mena will become the third-fastest growing region.

She said that governments in the region are projected to spend $11.6 billion on IT products and services in 2017.

“Software spending by governments will grow by 9 per cent, to reach $1.3 billion in 2017. Applications will grow 12 per cent in 2017 to reach $443 million,” she said.

The $12.4 billion banking spending includes total enterprise IT for internal spending and spending data on data centre systems, devices, software, IT services and telecom services.

Sau said most of the CIOs in the region have commented that pretty positively right now, spend money on new technologies and improve operations.

The highest growth rate is in the software segment like Big Data and BI Analytics. BI Analytics is expected to be the top priority for banks, which is seeing the same trend across the globe.

Banks are going to use the Big Data for customer engagement in a bid to improve the marketing tools and make money from digital channels.

The next largest growth rate is in data centre systems at 6.7 per cent and IT services come at six per cent, but on the long run, she said that IT services will become the second largest growth area. The growth in data centre is only for short term.

Sau said that IT spending has been dampened by uncertainty in the global scenario. But, data centre systems are making a comeback in banking and securities as banks are investing in core applications and servers.

In 2017, the biggest IT spenders in the region are the UAE, Turkey and Saudi Arabia but when it comes to banking and securities spend, Saudi Arabia is the biggest at $2.2 billion this year, followed by Turkey at $1.6 billion and the rest of the Middle East at $6.9 billion, which includes the UAE also.

“Digitisation is the main trend in the banking industry. They are gradually getting on to the cloud platform but that is not on top of their agenda. Under the software segment, ERP (enterprise resource planning) has the highest projected growth of 12 per cent and that comes under cloud,” she said.