Information technology spending by the global wealth management industry will reach almost $35 billion by 2016, and will include heavy investment in digital channels, predicted global analyst provider Ovum.

Between 2011 and 2016, IT spending in North America will increase at a compound annual growth rate of 7 percent, with U.S. investment reaching $14.348 billion, according to Ovum forecasts.

“Increasing profitability is a priority for all financial institutions,” said Jaroslaw Knapik, senior analyst of financial services technology at Ovum. “As the use of digital channels increases, banks will strengthen their focus on mobile channels and self-service functionality in an effort to connect and empower their customers.”

Ovum research indicates that the growth in IT spending by wealth management institutions will give rise to more personal financial management tools offered to customers. Increased support for smartphones and tablets will be driven largely by investment from non-financial institutions, as well as the recent advances made in mobile finance platform technology.  Investment in Internet and presence technologies by North America’s high-net-worth banking and financial planning businesses will reach $466 million, while retail brokerage and retail asset management organizations will increase their investment to $410 million and $262 million, respectively.

“Customer attitude toward banks has changed greatly as a result of the financial crisis,” Knapik concluded.  “Increasingly, digital channels are being developed to improve customer loyalty and cross-selling opportunities, but also to lower servicing costs. While the economy is recovering, organizations should be focusing on the opportunity to increase revenue and improve trust among customers. This, coupled with the increased investment in personal finance management tools, will enable more self-management and closer monitoring of financial assets, helping to increase overall knowledge of finance management.”

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