According to IDC, the overall IT spending of UK banks will grow at a rate of 5.7% in 2004, which is above the Western European banking industry average. IDC expects banks to concentrate IT spending on capital market operations and on all support activities generally referred to as "back-end." Demand for IT services will remain the backbone of IT spending even though packaged software is expected to record the highest growth rates in the next five years. Hardware spending is expected to remain steady in 2004 in comparison to 2003, but in the long term, the value of spending in this sector will increase around 2%, with the networking area growing faster. IT spending in the insurance sector is expected to rise at 4.2% CAGR from 2003-2008, with cost saving still imperative for insurance companies playing in the U.K. arena. In the short-term, IT spending growth in the life insurance sector will increase less than in the non-life sector.