Cost reduction is the number one business objective for technology spending in the year ahead, followed closely by risk management.

Boston, MA, January 12, 2009 – A new report from Aite Group, LLC provides insight into the IT spending plans for capital market firms in 2009. Based on surveys of 28 senior technology executives at a cross-section of capital markets firms - including hedge funds, retail brokerages firms, sell-side firms, private client groups, traditional asset managers and full-service firms - completed with the help of Wall Street & Technology magazine, the report predicts an average technology budget cut of 5% for 2009.

Given the current market conditions, one might expect significant budget cuts, but projects may be frozen for reasons other than budget during the first half of 2009. Aite Group expects capital markets firms in the United States to spend roughly US$40 billion on technology in 2009, a US$2 billion cut from 2008 spending. Likewise, helping firms reduce cost has become the top technology priority for 2009, with 29% of respondents ranking it number one. The report also addresses both capital markets-specific and core platform technology spending priorities, and includes data on risk management priorities, hiring trends, and areas in which technologists are looking at cutting spending.

"While 2009 poses significant challenges for technologists, there are also opportunities to address items that have been sorely neglected under the auspice of effective risk management and reducing human cost," says Adam Honoré, senior analyst with Aite Group and a co-author of this report. "The continued explosion of market data and asset class expansion are also sound drivers for using 2009 to fix latent issues. For the first time in many years, the expectation is not on supporting growth. Improving data quality, fixing bad business processes, getting rid of paper reporting, and improving exception handling are achievable goals for many technologists."

This 31-page Impact Report contains 24 figures. Clients of both Aite Group's Retail and Institutional Securities & Investments services can download the report by clicking on the icon to the right.

Related Aite Group Research:

• The Case for Mashups in Capital Markets
• The Rise of Research Systems: Man vs. Machine
• Desktop Convergence of Wealth Management and Retail Brokerage: Competing in a Changing Landscape
• The Rise of Unstructured Data in Trading

To purchase this report or
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Aite Group Sales
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