Posted June 25, 2009

NEW YORK -- A survey of over 350 Wall Street information technology (IT) professionals has revealed a significant increase in the level of interest in new technologies and computing models, in particular cloud computing, as firms seek to overcome budgetary restrictions and skills shortages.

Of about 100 professionals from leading universal banks and broker-dealers surveyed by IBM in conjunction with the Securities Industry and Financial Markets Association (SIFMA), the number predicting that cloud computing would force significant business change more than doubled (from 21 percent in 2008 to 46 percent in 2009), making it the top disruptive technology, ahead of even operational risk modeling and mobile technologies.

“The financial markets form what is termed a complex system which is made up of a vast number of participants, from individual traders to industry entities such as clearing houses, exchanges and central banks, each of them generating and consuming more and more data every day,” says Ian Hurst, General Manager, Financial Services Sector, IBM. “Firms need to capitalize on the latest technologies such as cloud computing to better manage all this data, operational risk modeling and analytics to assess it and turn it into market insight, and then mobile technologies to place it in the hands of the decision makers, wherever they are.”

Cloud computing is an emerging computing model in which processing, storage, networking and applications are accessed as services over networks -- public, via the Internet; or private, via intranets. The cloud model has the potential to cut the costs, complexity and headaches of technology. The research shows that interest in and awareness of cloud computing have risen dramatically and that a great opportunity therefore exists for service providers that can make cloud computing both economic and safe for Wall Street firms.

“Often clients or regulators will call our members firms about a trade that happened several months ago,” says Randy Snook, Senior Managing Director and Executive Vice President, SIFMA. “New technologies will make this far easier. Cloud computing can allow firms to keeping vast amounts of data online indefinitely and mobile technologies can give brokers instant access from anywhere so that they can quickly answer such questions without having to pull out and search their data archives.”

IT budget pressures may be leveling, according to survey respondents. In 2008, 31 percent of respondents predicted cuts in the year ahead while 52 percent expected their IT budgets to remain the same or increase. Despite increased financial pressures in the last year, the outlook remained much the same in 2009 with 32 percent predicting cuts in 2010 and 50 percent expecting their IT budgets to remain the same or increase.

“With the kinds of challenges Wall Street firms face, a trend towards cloud computing might be expected. Wall Street firms cited limited IT staff/human capital, high implementation costs and business and IT disconnect as their main internal challenges,” adds Hurst. “Cloud computing specifically addresses each of these with compelling economics, self-service and virtualization.”



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