IT spending by the financial markets industry will notch $90 billion (approximately Rs 4,04,813 crore) by 2015 globally, buoyed by strong growth in Asia Pacific (APAC) and a redux in the hedge funds sector, forecasts the independent technology analyst, Ovum.
The APAC region will register some of the strongest growth in financial markets IT spend accounting to $18 billion (approximately Rs 80,945.93 crore), as economic growth gains traction due to transfer of power by global companies to the region, according to Ovum.
In China, IT spending will grow by a compound annual growth rate (CAGR), of 8.8 per cent from 2011 to 2015. Similarly, Hong Kong will experience a CAGR of 8.1 per cent for the same period and Singapore 7.1 per cent. Although the amounts invested will be lower, growth in all three will outstrip the US and the UK and Ireland, which will hit CAGRs of 6 per cent and 5.8 per cent respectively.
Daniel Mayo, financial markets technology analyst, Ovum, says: “While there will be growth in nearly every major market, the Asia-Pacific countries will be at the forefront. This is mainly due to global companies shifting their decision-making power from New York and London to cities such as Beijing, because of their growing economic influence.”
Additionally, IT spending of the Asian-Pacific countries in the hedge funds sector will grow a CAGR of 14 per cent from 2011 to 2015. This is the strongest growth of all the lines of business and is being driven by resurgence in the hedge funds market as investors seek high returns after the economic meltdown of 2008-09.
Mayo says: “The global hedge funds market was badly affected by the financial crash, with investors staying away due to its disastrous performance. As a result, investment in IT fell significantly in 2008 and 2009. However, the Asia Pacific market proved far more resilient and as investors seek higher returns is set to be a major driver for industry growth in 2011.”
According to Mayo, much of the investment in all regions and lines of business will be made in risk management systems, as well as reporting systems that allow financial markets companies to provide greater transparency and comply with new industry regulations such as Basel III.