Depressed world economy and tougher regulation will make the financial markets rally to IT
Buy side to invest in IT to reduce dependence on brokers whilst sell side will focus on product accounting for more complex, multi-asset strategies
COMPLIANCE and risk regulations will drive technology spending in 2013, says research firm Ovum.
In a new report, 2013 Trends to Watch: Financial Markets Technology, Ovum concluded that a combination of a depressed world economy and tougher regulation will make the financial markets rally to IT in order to underpin more risk-averse business strategies.
Regulatory compliance in particular will place further IT investment requirements on market participants, with risk analytics (covering market, credit, operational, and a new dimension, liquidity risk) becoming key.
Specifically, companies will harness emerging ‘in-memory’ technology capabilities to handle the kinds of volumes of data at the speeds required for intraday risk management and reporting.
Rik Turner, senior analyst, Financial Services Technology at Ovum, said 2013 comes with a lot of challenges for the financial markets, with both the buy and sell sides of the industry turning to greater use of technology as the solution.
“The buy side is looking to lower its dependence on brokers with heavy investment into front-end services as it looks to retain a much less faithful client base,” he said.
There will be a focus on client servicing as investor returns wane in 2013, making reports on how portfolios are performing more transparent, frequent, and readily accessible, with a big push into enabling access from mobile devices, for instance.
In an effort to drive cost out of its business, the sell side is predicted to increase the automation and optimize post-trade operations, with cloud services becoming a serious option for a number of functions.
“The sell side will look to underscore its complex multi-asset strategies with greater product accounting,” Turner added.
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