Regulatory changes will boost investment banks' IT budgets, says Ovum

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Regulatory changes will boost investment banks' IT budgets, says Ovum

Kathleen Hall

Financial services firms expect to increase their IT spending this year due to a raft of impending regulations and weak market growth, according to research.

A close study of IT directors in the capital markets sector by Ovum found organisations expected to increase IT budgets by 1.1% in 2013. This compares with a growth in IT expenditure of 0.6% in 2012.

Rik Turner, senior analyst at Ovum, said regulatory compliance, a desire to improve infrastructure and investments in client servicing were driving IT spending in Europe.

Customer experience offers a key opportunity to build investor loyalty and create a competitive advantage, said Turner.

Although real-time reporting is still some way off, a move towards intra-day reporting via multiple client devices will enhance the customer experience, Turner added.

He said in the current climate even a modest increase in IT spend was positive. “The buy side is finding ways to increase returns by reducing the reliance on a single broker and adopting multi-prime strategies, as well as through direct market access (DMA),” said Turner.

“There is no doubt the buy side is becoming more tech-savvy and looking to lower its dependence on brokers – the continuing fall-out from the Lehman debacle. 

"Of course, with a raft of regulation – including EMIR and MFID II on the horizon – spending on compliance will remain a high priority.”

 


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