US investment banks and money managers may jeopardise future revenues by over-zealous cuts to their spending on IT, according to new research, which has claimed these firms will reduce their IT expenditure this year for the first time on record.

US institutions have been increasing their IT spending at about 5% for the last few years, according to research firm TowerGroup, but this year's expenditure is set to be down 3.7% for the first time in US banking history after "a watershed year for change in the financial services industry, and by extension the technology market".