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The world’s leading investment firms are stepping up technology spending in an effort to fend off competition from fintechs and traditional rivals, Moody’s Investors Service reports.

The rating agency said that its survey of global investment banks found that firms have devoted an average of 18.3% of total operating expenses to IT over the past three years, representing about US$72 billion per year.

“More importantly, the percentage of total operating expenses allocated to IT has steadily increased over this period,” Moody’s said.

Moody’s said that the tech spending is being driven by firms’ desire to protect their revenue from fintechs and to keep up with their peers.

“Sustaining these investments and smartly executing digital strategies will be important to help fend off the threat from fintech firms as they continue to test the boundaries of the banking business, particularly in the simpler retail products and payment services that account for about a third of the investment banks’ revenue,” said Michael Rohr, senior vice president at Moody’s.

“These investments are also essential for the banks to keep up with their peers.”