2011 Trends to Watch: Financial Markets Technology
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Introduction
The financial markets sector seems to have emerged from the financial crisis in relative health. However, the sustainability of future growth is a key question for 2011. This brief identifies the top forces that will shape the industry for the next year and explores the ensuing market changes, resulting business strategies, and implications for financial markets technology investment priorities.
Features and benefits
Key buy-side investment priorities for 2011 will be around front-office trading systems, with focus on driving investment performance; client servicing, with focus on increasing transparency and communication to reduce AuM outflows; and risk management, to allow institution to manage market volatility more effectively.The focus of technology investment in sales and trading will be dominated by the front office in 2011. The contest for achieving ever-lower trading latency will remain important in 2011, driving significant investment in trading infrastructure, particularly around complex event processing (CEP) and in-memory databases.
Your key questions answered
Introduction
The financial markets sector seems to have emerged from the financial crisis in relative health. However, the sustainability of future growth is a key question for 2011. This brief identifies the top forces that will shape the industry for the next year and explores the ensuing market changes, resulting business strategies, and implications for financial markets technology investment priorities.
Features and benefits
- Analysis of the impact of regulation on bank strategy and investment priorities.
- References latest Business Trends primary research data on the financial markets technology sector around IT investment growth priorities for 2011.
- Sub-sector examination of key trends and drivers that will shape industry in 2011.
Key buy-side investment priorities for 2011 will be around front-office trading systems, with focus on driving investment performance; client servicing, with focus on increasing transparency and communication to reduce AuM outflows; and risk management, to allow institution to manage market volatility more effectively.The focus of technology investment in sales and trading will be dominated by the front office in 2011. The contest for achieving ever-lower trading latency will remain important in 2011, driving significant investment in trading infrastructure, particularly around complex event processing (CEP) and in-memory databases.
Your key questions answered
- How will the top business imperatives for the sector change in 2011?
- When will institutions need to respond to regulatory initiatives?
- What are the top IT investment and IT spending growth areas for 2011?
SUMMARY
Catalyst
Ovum view
Key messages
BUSINESS TRENDS AND TECHNOLOGY ENABLERS
Volatility and uncertainty will remain industry watchwords for 2011, and will drive the need for IT agility and flexibility
REGULATORY CHANGES WILL DOMINATE BOTH BUSINESS AND TECHNOLOGY AGENDAS IN 2011
The new regulatory approach will demand immediate investment despite uncertainty
Basel III will require initial readiness by 2012 despite longer term timetable
Structural changes will drive the need for both enterprise and local reporting flexibility
Banks will need to enhance operational controls and tackle data management
The combination of rules and principles will require tighter and more flexible operational controls
Master data management (MDM) will be essential for the management of the regulatory reporting burden
THE BUY-SIDE FOCUS WILL SHIFT FOCUS TO ALPHA GENERATION ALONGSIDE COST REDUCTION
Competitive pressures will drive the need for more consistent and stronger investment performance
Tactical cost reduction is approaching its limits, driving the need for more transformational approaches
Investment managers need to tackle total expense ratios and transaction costs as well as management costs
Back-office function will need transformation or consideration of BPO to manage cost pressures
SELL-SIDE WILL FOCUS ON TRADING EFFECTIVENESS AS WELL AS PERFORMANCE
Investment in driving greater trading performance will continue
Use of complex event processing will extend beyond trading algorithms
Focus on in-memory databases will be important in drive for ultra low-latency
Trading strategies need to incorporate transaction cost analysis to enhance effectiveness
RECOMMENDATIONS
Recommendations for enterprises
Enterprises should consider cloud-based models to support greater agility
CIOs need to have roadmaps for application consolidation and standardization
Organizational governance policies needs to include control of data as well as IT
Recommendations for vendors
Vendors should expect a stronger market in 2011, but must prepare for continued delays in the decision-making cycle
Vendors will need to have an Asian presence to capture growth opportunities
APPENDIX
Further reading
Methodology
Author
Disclaimer
Catalyst
Ovum view
Key messages
BUSINESS TRENDS AND TECHNOLOGY ENABLERS
Volatility and uncertainty will remain industry watchwords for 2011, and will drive the need for IT agility and flexibility
REGULATORY CHANGES WILL DOMINATE BOTH BUSINESS AND TECHNOLOGY AGENDAS IN 2011
The new regulatory approach will demand immediate investment despite uncertainty
Basel III will require initial readiness by 2012 despite longer term timetable
Structural changes will drive the need for both enterprise and local reporting flexibility
Banks will need to enhance operational controls and tackle data management
The combination of rules and principles will require tighter and more flexible operational controls
Master data management (MDM) will be essential for the management of the regulatory reporting burden
THE BUY-SIDE FOCUS WILL SHIFT FOCUS TO ALPHA GENERATION ALONGSIDE COST REDUCTION
Competitive pressures will drive the need for more consistent and stronger investment performance
Tactical cost reduction is approaching its limits, driving the need for more transformational approaches
Investment managers need to tackle total expense ratios and transaction costs as well as management costs
Back-office function will need transformation or consideration of BPO to manage cost pressures
SELL-SIDE WILL FOCUS ON TRADING EFFECTIVENESS AS WELL AS PERFORMANCE
Investment in driving greater trading performance will continue
Use of complex event processing will extend beyond trading algorithms
Focus on in-memory databases will be important in drive for ultra low-latency
Trading strategies need to incorporate transaction cost analysis to enhance effectiveness
RECOMMENDATIONS
Recommendations for enterprises
Enterprises should consider cloud-based models to support greater agility
CIOs need to have roadmaps for application consolidation and standardization
Organizational governance policies needs to include control of data as well as IT
Recommendations for vendors
Vendors should expect a stronger market in 2011, but must prepare for continued delays in the decision-making cycle
Vendors will need to have an Asian presence to capture growth opportunities
APPENDIX
Further reading
Methodology
Author
Disclaimer
TABLES
Table: Top market conditions, strategy, and technology enablers for 2011
Table: Top market conditions, strategy, and technology enablers for 2011
FIGURES
Figure: Key IT growth and IT spend areas for buy-side in next 18 months
Figure: Key IT growth and IT spend areas for sell-side in next 18 months
Figure: Key IT growth and IT spend areas for buy-side in next 18 months
Figure: Key IT growth and IT spend areas for sell-side in next 18 months
