Technology vendors 2005: Boom time for IT vendors
Banks are spending more to remain competitive, but with so many firms to choose from how can they be sure a vendor will understand their needs? Euromoney's second financial technology users' survey has some answers.
By Oonagh Leighton
Research and additional reporting from Katrina Haagensen, Kap Monet
and Da Ly Nguyen
FINANCIAL SERVICES SOFTWARE is big business. In 2005, European banks' IT expenditure will total more than €45 billion, almost 17% of which will go on external software, according to IT research and consulting firm Celent Communications. IT costs in the US securities industry will reach $26 billion this year, of which external software accounts for a quarter. And the market is in an upward spending cycle [see charts].
For financial firms, technology acts as a powerful competitive lever for delineation and gain.
"Technology is a huge differentiator and the gap is getting wider not narrower," says Clifford Lewis, chairman of Currenex, an online FX trading platform. "This is an area where organizational issues become very important. You have to be nimble – it's that or you're road kill." That means mentally nimble. "Traders used to be six foot four inch ex Parachute Regiment types. Now the world is being taken over by the smaller maths genius," he adds.
Energy is being spent on creating more reactive and accountable firm-wide software system architecture.