Despite the slumping economy, security and disaster recovery spending will rise in 2002 due to a heightened sensitivity to IT security post-September 11.
Companies are increasingly aware of the significant business disruption that can result from insufficient IT security, and many are reevaluating their backup networks and investing in security and decentralized disaster recovery systems.
"Various experts have predicted that a major attack will be made on the nation's financial system sometime in the not too distant future," said Michael McNamara, an analyst at Datamonitor. "This vulnerability is causing increases in spending on such security solutions as antivirus and authentication software as well as decentralized solutions such as storage area networks (SANs) and virtual private networks (VPNs)."
eSecurity is one of the few areas in retail banking that will witness an increase in spending, according to Datamonitor. In fact, overall IT retail banking spend is estimated to increase by only 2.05 percent in the next four years. As the slumping economy continues to highlight IT failures, financial services institutions must provide a measurable near-term ROI in order to achieve successful technology project funding.
Due to the industry-wide phenomenon of decision makers dictating how IT dollars will be spent, vendors must now communicate both the technical aspects and the business logic behind their products.
"Due to the recent market slumps, information technology investments are under much greater scrutiny," said McNamara. "Ventures or products that are discretionary in nature, such as mobile retail distribution platforms, will have difficulty gaining budget approval."