City IT budgets are set for another year of growth in 2007, albeit at a slower pace than the double-digit hikes seen in 2006, according to a survey conducted by Finextra Research.
The research (The importance of performance: Technology and business trends in financial services 2006
), conducted among 43 investment banks, asset managers and hedge funds in August, and sponsored by Intel, recorded an industry-wide budget increase of 11.1% in 2006. The growth trend is set to continue into the new year, but at a much slower pace with a cumulative net increase of just 6.9%
The budgetary constraints come at a time of maximum regulatory pressure, with compliance demands for Basel, MiFID and Sepa deadlines combining to stretch IT resources. Industry readiness for the new MiFID regulations remains uncertain. Although 42% of survey respondents rated it as under control, 23% said there was still work to do, with a number of outstanding issues yet to be addressed ahead of the 2007 deadline.
In today’s highly regulated markets, with industry watchdogs keen to promote greater market integrity, the ability to efficiently analyse data is causing concern. A quarter of respondents said they experienced bottlenecks on a regular basis, with 35% reporting major risk computation issues due to processing power limitations.
In the same vein, energy consumption and record high energy prices have already begun to influence procurement and application design decisions, with one-third of firms ranking the issue as a major concern, both now and in the coming years.