76 percent of respondents expect their firm’s investment in technology to increase in 2013 while only 2 percent expect a decrease
Despite impending new regulations in the U.S. and Europe, a recent survey has found that technology spending in financial the financial services sector is being driven by the need to improve efficiencies and reduce costs rather than simply complying with new regulations. The survey, “IPC Trading Technology Investment Trend Survey” conducted by IPC Systems, Inc., a leading provider of voice and electronic trading communications solutions to the world’s top financial services firms and global enterprises, and released today, highlights the top trading technology investment trends for financial services firms in 2013.
Among the findings: investment in trading desk technology was named as the top priority for nearly one-third of firms, more than double the number of firms saying electronic or algorithmic trading technology was a top priority and that nearly half of firms surveyed listed the need to increase efficiency and reduce costs as the primary driver of their technology spending priorities.
The survey polled more than 100 executives at global trading firms with nearly a quarter consisting of C-level respondents and 87 percent indicating having approval or influence on technology spending decisions.
More than three-quarters of respondents said their firms are increasing trading technology spending in 2013, while only two percent indicated they are cutting spending. Nearly half of firms said they will invest in technology to support electronic trading, but only 12 percent said it was their top priority. Forty percent of firms said they will be investing in technology for traders and the trading desk. And over all, 30 percent said this area was a top priority. Other areas named as top priorities were technology for back offices, named by 16 percent, network infrastructure, also named by 16 percent and trading support technology with 14 percent. High frequency trading was named as a top priority by 12 percent and algorithmic trading by 11 percent.
“The survey results confirm what we have seen over the past year or so,” Michael Speranza, Senior Vice President, Product Management, IPC said. “Firms see tremendous opportunities for competitive advantage by investing in technologies that allow traders to do their jobs more efficiently and effectively. Regulations along with increased complexity can slow down the trading cycle. Firms see that new technologies have the ability to make collaboration between traders and off-floor support staff faster, easier and more comprehensive. These can give them an advantage in speed, adaptability and innovation as well making it easier to ensure regulatory compliance.”
Firms are also looking to that new technology to be app-driven to help drive efficiencies and competitiveness. Fifty-one percent of respondents cited applications that offer greater integration of market data and trading communication systems as a key tool for success in 2013. Twenty-nine percent cited mobile applications as also being of interest in 2013 to increase productivity and transparency into the trading workflow.
Additional key findings from the IPC 2013 Trends Survey:
- 45 percent of respondents view desktop trading applications as an area of investment in 2013
- 28 percent of respondents are seeking apps that offer greater collaboration between on/off floor traders and support staff
- Nearly a third of firms say they will make investments to make traders more mobile and in doing so expect to see significant benefits in terms of efficiency, regulatory compliance or competitive advantage
- 100 percent of respondents either have implemented, are implementing or will implement in 2013 a cloud-based infrastructure on the trading floor
The research covered a broad range of roles for staff supporting the full trading lifecycle from order initiation and execution to clearing and settlement. Respondents came from the front, middle, and back office and included people involved in both the business and technology side of trading support.