As the Christmas lights on Oxford Street suggest, the end of the year is fast approaching, and projections of financial services firms' technology spending patterns for 2010 are popping up faster than X-Factor related headlines in Heat. Surprisingly, though, a slightly positive consensus is beginning to emerge.

The good news is that growth in technology spend is generally anticipated for next year, but it's likely to be a slow process. Consultancy TowerGroup is predicting a 4% increase in IT budgets by European financial services firms by 2011, but this follows a 14% drop between 2007-2009.

Bob McDowell, European research director at TowerGroup, said that risk management IT projects, driven by regulatory requirements, will continue to be a key area of focus for financial services firms.

He adds: "Technology spend on advanced analytics to enhance corporate broking and advisory services will be an unusual feature as companies access the markets for capital and seek to identify long term investors to support their corporate strategies and rebuild their businesses post the financial crisis and economic recession."

IT consultancy Gartner is slightly more optimistic, predicting a 3% rise in overall financial services tech spend in 2010 compared to 2009, but this is still down on highs of previous years.

"In the midst of many postponed, canceled or restructured IT projects in financial services, new sets of priorities and strategies will become more coherent toward the end of 2009. Movement toward SaaS and cloud computing, shared services, and more selective outsourcing will take firmer shape as near-term priorities to address constrained IT budgets," it said in a recent report.

Celent, meanwhile, has yet to produce its European spending projections, but has been fairly bullish on the US market, predicting continued spend on legacy systems, service-oriented architecture (SOA) and hiring IT staff.

"There will be an increase of 3.5% into 2010 because of re-hiring," said Celent senior analyst Jacob Jegher in a recent webinar. "We think there will be rehiring in IT and a focus on new investments, especially in wholesale."

US-based consultancy TABB Group is suggesting that while some back office IT projects could suffer, investment banks will continue to focus on revenue-generating areas, as well as risk management systems.

As we've suggested previously, commodities, equities, equity derivatives and foreign exchange trading systems have been relatively fertile areas of recruitment of late.