Global wealth management technology spending by financial companies will reach $3.7 billion in 2010, a 5% increase over 2009, according to the latest research from Boston-based Celent.

Most of this spending will be on technology centered in the front office as firms try to improve the parts of their business that interact directly with customers, says Isabella Fonseca, co-author of the report, called “Wealth Management Business and IT Priorities for 2010: A Global Perspective.”

And while high-net-worth and ultra high-net-worth will remain the main focus for financial institutions, there will be an effort this year more then ever before to broaden the reach and expand to customers who are lower on the wealth scale, Fonseca said. The mass affluent and mass market segments make up 27% and 32%, respectively, of the total $88 trillion in wealth, as of the end of 2009, in North America, Europe and Asia, according to Celent.

These two segments usually do not require sophisticated products or customized services, but the challenge in tapping them is their far-flung geographic distribution. And wealth management companies will use their new technology to offer more automation and greater web technology in the hopes of enticing those potential customers to ultimately reach out and request a meeting with an advisor, Fonseca said.

The biggest challenge facing the firms today involves reducing costs and improving return on investment, according to the report. In today’s post-meltdown environment in which almost all financial companies are focused on improving their balance sheets, one result is a more heightened focus on the way they target and serve clients, the report said.