The financial services industry, including insurance, spent the most on information and communications technology (ICT) last year, at $9.6 billion – nearly 22% of the entire ICT spend in Australia.

A new report from technology researcher International Data Corporation (IDC) shows ICT spending in the financial services industry will grow to $11.1 billion by 2015.

However, expectations of growth are lower now than they were a year ago.

“The banking, financial services and insurance sector is facing a more challenging period,” IDC Research Manager Emilie Ditton said.

“Declining margins in the banking sector are driving a renewed focus on cost savings and productivity but also revenue growth and customer engagement.”

Ms Ditton says the insurance industry has been slower than the banking sector to engage in new technological means of customer engagement.

“There’s no doubt the insurance sector is conservative in terms of ICT deployment of any type,” she told insuranceNEWS.com.au.

Ms Ditton says customer engagement has occurred “through as many channels as possible”, particularly social networks such as Facebook and LinkedIn, and this is “coming through a bit in insurance”.