Burton-Taylor International Consulting LLC, a leading market research, strategy and business consulting organization, today released data showing the global spend for financial information and analysis topped US$23 billion in 2007, with roughly half coming from the Americas and almost 30% occurring in the Fixed Income/Foreign Exchange (FX) Sales & Trading segment.
Burton-Taylor estimates that worldwide information and analysis spend by the corporate and financial services sectors grew 4.9% in 2007. Asia led all regions with nearly 8% growth, year on year. Not surprisingly, China was the fastest growing country at 12.9%, followed by India at 11.5%. Fixed Income/FX Sales & Trading, totaling US$6.47 billion globally, is the largest single segment within each major region. While Investment Management is the second largest segment in the Americas and Asia, Equity Sales & Trading holds the number two spot in the Europe, Middle East and Africa region.
Although 2008 will be challenging for the industry, Burton-Taylor expects financial information/analysis spend to grow at a rate of just over 6% for the year, to US$24.4 billion. Regulatory changes cascading through countries around the world, coupled with the continued evolution and maturity of the markets in China and India, will drive growth.
“Uncertain economic times, particularly in the US, will make 2008 a year of caution for many clients of the information/analysis vendors,” says Douglas B. Taylor, Managing Partner of Burton-Taylor. “Fortunately for data suppliers, uncertain times often increase the importance of high-quality, differentiating content. With a smaller margin for error, and US economic uncertainty generally seen as short rather than long-term, many financial services clients will be less focused on internal contraction and more focused on finding Alpha. Consequently, they’ll continue to invest in premium information and tools.”
“Even with the credit crunch and pending elections in North America, 2008 looks to be an interesting and exciting year for the industry,” Taylor says. “Generally, stricter reporting standards and the growing trend for corporations to take a more proactive and direct approach to their investor relations and communications globally, set this up to be a banner year for spend in the Corporate segment.”
Moreover, according to Taylor, the pending merger of Thomson and Reuters, which gives the new combination a 32% share of this US$23 billion market, will force answers to several interesting questions. Will the new combination seek to maintain a dominant position in the low margin Wealth Management segment? How will the Investext, FirstCall and Multex franchises be impacted? Which company will step-up alongside Thomson-Reuters and Bloomberg to form the new “Big 3?”
