IT expenditure by the Asia-Pacific wealth management industry will top US$4.6 billion by 2015, said Ovum, attributing the growing spend to market recovery from the economic slump and more clients eyeing investment opportunities.
The forecast represents a "significant" growth rate of 8 percent between 2011 and 2015, the market research firm said in a statement released Thursday. The global figure, it added, is 6.5 percent.
According to Ovum, the wealth management industry includes the markets of banking, financial planning, retail brokerage and retail asset management.
While the amount of money spent on IT will be larger in developed economies, the emerging Asia-Pacific market is set for "explosive growth in the next five years", Ovum senior analyst Jaroslaw Knapik said in the statement.
China and India will be the major drivers of the expected increase in IT spend, with a five-year compound annual growth rate (CAGR) of 14 percent, and 12.5 percent, respectively. Comparatively, Ovum expects the CAGR for Australia to be 8 percent while South Korea's was estimated to be 7 percent.
The growth in technology spend by the wealth management industry is driven by "a return to better days for the industry", as the number of wealthy customers looking for investment opportunities gradually increases, it noted.
The sector, Knapik explained, had "bore the brunt" of the global slump but with economic recovery now underway, the industry's outlook for IT investment is more positive.
According to Ovum, the growing Asian market, the need to invest in service channels such as the Internet and compliance requirements of new regulations such as Basel III--a global regulatory framework stipulating requirements on the capital and liquidity of banks--are all pushing Asian wealth management companies to spend more on IT.
Within the industry, the banking, financial planning and retail asset management sectors will increase IT spending in Internet services by 8.6 percent during the forecast period. The retail brokerage market will step up Web expenditure by 7.3 percent.
Knapik reasoned that the growth in Internet spend stems from the need to create Web sites and applications that allow financial advisors and customers to access company information online via mobile devices including smartphones and tablets.
Investment will also go toward upgrading online services with personal financial management tools as well as closer integration of the online channel with middle and back office technology, such as product origination, customer information, and investment and portfolio management systems, he added.
Ovum's observation of growing IT investment is in line with a report from Gartner this month, which noted that worldwide IT spend will grow 7.1 percent to reach US$3.67 billion this year.