IT outsourcing is on the increase and will gain pace in the long run, it has been suggested.

Tony Freeman, director of industry relations for Europe, the Middle East and Africa at Omgeo, said the option is becoming increasingly popular, Sophia Morrell reported for the International Custody and Fund Administration.

The industry figure commented: “There is an assumption among many big investment management firms that they will eventually outsource their middle and back office to one of the providers.”

According to the source, sector participants noted the phenomenon has been steadily gaining momentum since last year, which has been mainly down to companies increasing their budgets for projects of this type.

A recent report released by IDC forecast European IT services expenditure will rise in this year and next.

The study found IT outsourcing to be the core driver behind such growth after IT budgets stabilised following the easing of the recession.