The global economic distress of late might portend a crime wave that should be driving banks to hunker down and investment in protecting their enterprises. Not so, according to a new report from Frost & Sullivan, which found that investments by financial players in electronic physical security systems were sluggish.

The report, which tracks the revenues of firms selling IP-based electronic security to banks, shows that growth rates will flatten out over the next two years, in what was a $936 million market in 2007 for North America and Western Europe. “The critical need for security in banks will help in some way to sustain the spending for physical electronic security,” says Matia Grossi, an analyst for Frost & Sullivan’s electronics and security group. “However, the growth rates in 2008 and 2009 are expected to be at least two percent less than the peak in 2007.”

Grossi says de novo banks and new branches typically are where the latest technologies are installed, but many such openings are likely on hold or have been abandoned. But regulatory and insurance requirements will likely require banks to maintain minimum levels of e-based physical security, and should lead to a rebound to normalized spending. Given this, the market is expected to expand to $1.463 million by 2013.

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