The US finance and insurance sector companies have increased their R&D investment by 70.4% as compared to 2022, says the latest annual data. This happens to be the second highest increase across all sectors in the US.
In 2023, companies went on to invest a total of $20.9 billion in R&D, which was up from $12.3 billion in 2022. The level pertaining to rising investment is nearly seven times more than the US average.
Specialist tax experts underscore that companies innovating within the sector could be missing out when it comes to tax savings, and are encouraged to assess their own R&D spend beside R&D tax credit criterion. The average successful claim through the sector was $1.1 million in 2022.
The evaluation finds the last surge happens to be part of sustained investment in innovation from the industry, with an almost three-fold surge in R&D investment over half a decade. Finance as well as insurance companies now comprise 1.74% of R&D spend throughout all companies across the US.
The research, which happens to be collated by Source Advisors, R&D tax credit specialists, evaluates almost 10 years of R&D investment figures within the US by way of using the latest available data so as to highlight the sectors that are investing in innovation so as to fuel growth.
Investment in R&D happens to be no longer optional, but it is indeed a strategic necessity so as to stay ahead in the competitive spectrum, says senior director of tax controversy at Source Advisors, Moises Romero. He adds that they have seen through working with national and international firms in the finance and insurance spectrum the rising importance placed on being at the forefront when it comes to technology so as to improve existing services as well as identify new innovation routes.
R&D expenditure can span a breadth of investment areas, like the design and development of new software elements, coming up of data mining techniques, through to the development of risk management systems. By way of specialist guidance, companies across the finance sector stand to get substantial savings on their tax bills via R&D tax credits.
It is worth noting that in the fast-evolving fintech sector, the allocation when it comes to increasing budgets for R&D as well as innovation is majorly pushed by the requirement so as to stay ahead in a competitive market that is very fierce, says the CEO at Mandala Exchange, Nathan Flanders. The new technologies, such as blockchain and AI, consistently go on to reshape financial services, needing constant innovation in order to offer secure, efficient, as well as user-friendly products.
Apparently, for companies that are looking to optimize their R&D investment, going ahead and embracing a model of continual review as well as alignment with strategic objectives holds the key. By doing so, businesses can make sure that their investment when it comes to innovation not only goes on to fuel growth but also delivers returns that are measurable.