According to gross domestic product (GDP) data released by the Australian Bureau of Statistics (ABS), businesses spent a record $A3.134 billion on software during the June quarter of 2013.

The Australian National Accounts data revealed that the seasonally adjusted private software spend rose 2.1% from $A3.07 billion in the March quarter of 2013 and was up 7.9% from a year earlier, reflecting the increasing importance of information technology on the economy. The report also indicated the IT spend has hit record levels for several quarters.

According to Rhys Octigan, Head of Business Development in Australia and New Zealand for DST Global Solutions, a leading global provider of asset servicing, investment data management and analytics solutions to the investment industry, the Australian financial services sector has bucked the trend of falling productivity. 

“At $1.62 trillion, Australia is already the fourth largest pension market in the world and software will become a necessity in managing a pool of that size, Mr Octigan said. Super firms will increasingly need to allocate and spend greater amounts on software to more efficiently manage these assets, lower costs and drive higher returns to members.

“A key driver of productivity in the financial services sector has been the rapid adoption of innovative technology by consumers, including tablets and smart phones. Firms are challenged to improve consumer experiences and increase returns, and the adoption of mobile devices has become an important way of delivering products and services more quickly; as well as providing timely and accurate investment information for more insightful decision-making,” said Mr Octigan.   

Stronger Super reforms are also requiring superannuation funds to improve their back-office operations and become more transparent by reporting substantially more investment data to regulators and to members according to Mr Octigan.

 “This trend is driving all super funds to boost their investment in software and IT systems. That investment spend will continue to rise as super funds seek to streamline and reduce operational risk by replacing time-consuming, manual processes with automated ones.” 

The 13th annual FSC-DST CEO Survey launched in July and, based on the views of 55 leading CEOs in Australia’s financial services sector, confirmed that nearly all (96%) believe IT is a key consideration when conducting strategic planning. The majority (80%) of respondents believe that technology plays a major role in innovation and delivering new financial products. The survey also found that most CEOs expect their IT budgets to increase over the next two years driven by a desire to achieve productivity gains in order to stay competitive and meet new regulatory demands. 

“Technology is having a huge impact on the financial services sectors,” says Mr Octigan. “The demand for better investment data management and compliance to meet new regulatory and client requirements, means it’s time for all businesses to assess where upgrading their software and IT systems can make efficiencies to boost productivity.”