UK Market for Financial Trading Technology Valued at £2.7 billion

17th Annual Kimsey Consulting UK Dealing Room Survey Predicts 10% Increase
in Trading IT Spend

6 February 2004Kimsey Consulting
The independent market research and advisory services company, have today released the findings of their 17th annual UK Dealing Room Survey. The latest survey is predicting a 10% increase in trading and related technology investment by UK-based financial trading institutions during 2004. The UK is Europe’s largest market for financial trading technology, accounting for around one third of all trading positions, with an estimated value of £2.7 billion in 2004.

Although the study is predicting the first general increase in demand for
several years, the UK market is still an estimated 30% lower in value in
comparison to the late 1990’s. The study also shows that trading I.T. spend
is shifting toward annualised revenue accounting, reflecting the importance
of cost control as trading IT management work to maintain up to date
systems.

There is, however, growing evidence that trading technology buyers expect
more from their I.T. investment, maintaining the pressure on technology
vendors and service providers.

The latest edition of The UK Dealing Room Survey surveyed respondents with
direct responsibility for the trading technology needs of around 15,000
trading positions, as well as surveying the opinions of end-users.

The UK Dealing Room Survey provides coverage of all key financial trading
technologies – from market data and applications through to dealer boards,
business continuity and consultants. Information coverage includes market
share, market size, spend and demand and also buyer and user comments on
vendors, systems and market issues.

A selection of findings includes:

Market Data Vendors – Reuters continues to be the major provider of market
information, with approximately 40% market share, and an approximate 50%
share of all information service budgets. The number two player is
Bloomberg, with a resurgent Moneyline/Telerate in third place and Thomson
Financial in fourth. Reuters achieves the highest customer satisfaction
ratings in 7 of the 11 prompted criteria, though Bloomberg achieves the best
score overall.

News Wires – Reuters is also the dominant provider of newswire services to
the UK financial trading community. For the second year running Dow Jones
Newswires achieves the accolade of “Best Rated Service” from their
customers.

Internet-Based Services – around half of UK financial trading institutions
provide traders with direct access to the Internet. FT.com is the most
frequently accessed service.

Trading Room Applications – integrated trading and risk management
applications are increasingly prevalent. The trading applications sector
(worth more than £800 million in 2004) remains highly fragmented.

Dealer Boards/Turrets – in the UK market, Syntegra and IPC are the two
largest players. Of the three global turret/dealer board vendors, Etrali
achieves the highest overall level of customer satisfaction.

Voice Trading – around 62% of all trades are currently conducted by voice,
with around 40% of respondents expecting this to fall, compared to 16%
expecting an increase.

Most important item of trading desk technology – 40% of respondents say that
their market data terminal is the most important item of desk-based
technology.

Sources of Information on Trading IT Developments – most trading IT
management (c. 78%) obtain technology updates direct from vendors. Around
two-thirds also reference magazines and journals. More than half also
reference web-based sources.

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