Almost half of European asset managers expect to renew their software or technical infrastructure within the next two years, according to research conducted by Edhec and Misys Asset Management Systems.
The survey assessed current working practices at 60 European asset management firms, representing some EUR6.211 billion under management.
It found that despite the current financial slowdown, 58% of the respondents envisage a renewal of their software or technical infrastructure, with 47% planning to upgrade within the next two years.
Risk management, modelling and compliance are the primary areas for investment, with 60% of respondents concentrating on improving compliance, 46% on measuring the extreme risks of portfolios, 52% evaluating off-balance sheet positions, and 71% reporting on risks to clients.
Internal business demands, rather than external regulatory pressures are driving software spending decisions. Despite the looming imminence of Basel II and CAD III regulations only half of the sample were concerned by the issue of operational risk. And 82 per cent have not examined the question of setting up an internal model for evaluating operational risk.
The survey found the majority of firms have chosen a "best of breed" approach for their portfolio management systems - rather than integration - with only 14% integrating front-to-back systems. Only 17% have an integrated front office software package.