欧州の資本市場におけるトレーディング技術戦略

Overview

Introduction

Despite improvements in European financial markets, persistent lethargic conditions have meant that technology investments are still shaped by cost and efficiency drivers. However, growth initiatives are increasing, although selectively. Where are the opportunities for trading vendors and how should they go to market? How should institutions operate and where can technology be best utilized?

Scope

• Highlight trends and key areas of activities within capital markets sell-side trading sectors
• Map out a picture of the market landscape, competitive dynamics and vendor strategies for trading solution vendors
• Deliver strategic implications for both institutions & vendors, based on evolving market, competitor & financial services end-user dynamics.
• Provide market opportunities & forecasts for applications expenditure across asset management, brokerage and private banking sectors

Report Highlights

Driven by the uncertainty in the broader capital markets environment as a whole, trading related technology spend will be focused on two tenets: building capability for product innovation, and operating a lean and mean organization

Larger Tier 1 banks with strong franchises in specific asset classes will continue to provide a market for asset-aligned trading specialists, but there will be increasing pressures to create cross asset capability

Amongst established end-user segments, institutional brokerages will still contribute the largest area of application spend, although asset management and private banking sectors will provide the highest growth at more than 8% CAGR

Reasons to Purchase

• Understand trends and key areas of activities within capital markets sell-side trading sectors
• Gain insight into how the interplay of end-user trading, regulation & FSI dynamics are driving a renewed focus in growth initiatives & IT investments
• Obtain market forecasts for application spend across the various market participants

Table of Contents

EXECUTIVE SUMMARY

KEY FINDINGS

• The future decoded
• Competitive dynamics and strategic implications
  • Strategic implications for vendors
  • Strategic implications for institutions

CHAPTER 1 INTRODUCTION

• What is this report about?

CHAPTER 2 MARKET CONTEXT

• European trading - overview
• Business drivers and trends
• Regulation and political developments in the EU are not only imposing increased operating overheads but also changing the market structure and competition dynamics
• Two years on from the trough of the downturn, cost firmly remains a strong business and IT driver in capital markets environment
• Aggressive search for growth in higher-margin activities continues
• Innovation and growth in complex derivatives products for financial risk management
• Increasing emphasis on middle-office functions, especially credit and operational risk management activities
• Integration of equities and fixed income sales and trading continues to be a feature
• The rise of algorithmic (quantitative) trading in the US and increasingly in Europe

CHAPTER 3 BUSINESS / TECHNOLOGY IMPLICATIONS

• The focus on data management now extends to underline end-to-end processes and applications
• The return of STP, but not as we know it
• External STP improvements are slow due to the complexity of the trade flow lifecycle amongst multiple parties involved
• Evolution of product-centric systems towards multi-product back-office operations
• Back-office restructuring momentum extends beyond IT infrastructure and applications consolidation

CHAPTER 4 THE FUTURE DECODED

• Package application spend by end-user segment
  • Amongst established end-user segments, institutional brokerage will still be the largest area of application spend, although asset management and private banking will provide the highest growth
  • Hedge funds represent a continuing high-growth area for technology spend as middle-sized firms emerge and competition heats up in the prime brokerage sector
• Institutional brokerage - application spend by front, middle and back office
  • Driven by the uncertainty in the broader capital markets environment as a whole, trading-related technology spend will be focused on two areas: building capability for product innovation, and operating a lean and mean organization

CHAPTER 5 COMPETITIVE DYNAMICS

• Introduction
• Vendor offerings
• Vendor landscape and implications
  • Strategic implications for vendors
    • Larger tier 1 banks with strong franchises in specific asset classes will continue to provide a market for asset specialists, but there will be increasing pressures to create cross-asset capability
    • The race for cross-asset, front-to-back systems will be based on strong asset class coverage that provides best-in-class (or near best-in-class) functionality across trading classes, especially for vendors taking the pre-configured packaged approach.
    • For risk management specialists, there will be mounting pressures to marry best-of-breed risk-related data, application and analytics provision.
    • Increasingly, exceptions management functionality will be "bundled" into front-to-back systems
    • The combination of new wave technologies will lower the cost-performance curve - but the real question will be what applications will drive take-up in the next wave
  • Strategic implications for institutions
    • Capital markets institutions must develop a stronger mandate for integrated risk management across asset classes, and between front to back functions
    • Capital markets institutions need to streamline the product manufacturing process to address the risks inherent in the financial engineering of complex products
    • Capital markets institutions need to further adopt component-based approaches and accelerate componentization within applications development activities
    • Conclusion

CHAPTER 6 APPENDIX

• Definitions / Abbreviations
• Relevant readings
• Strategic Planning Program (SPP) writing team

List of Tables

• Table 1: Packaged application spend by end-user segment, 2004-2006
• Table 2: Institutional brokerage application location spend, 2004-2006

List of Figures

• Figure 1: Vendor landscape and strategic positioning
• Figure 2: Key drivers of IT strategy in European financial markets
• Figure 3: Capital markets businesses - the search for margins & growth
• Figure 4: Growth in Derivatives, 2001-2004
• Figure 5: Enterprise risk management
• Figure 6: Algorithmic trading growth, 1994 - 2004
• Figure 7: Data management - business and IT considerations
• Figure 8: STP - not as it was previously
• Figure 9: Trade flow lifecycle
• Figure 10: Leveraging synergies across asset-specific applications
• Figure 11: Restructuring trends
• Figure 12: European packaged application spend by end-user segment, 2004-2006
• Figure 13: Institutional brokerage application location spend, 2004-2006
• Figure 14: Trade flow value chain / segments
• Figure 15: Vendor offering matrix
• Figure 16: Trading institutions approach to IT core systems development
• Figure 17: Vendor landscape and strategic positioning
• Figure 18: Adoption framework - next-generation computing
• Figure 19: Sell-side focus for improving operational functions
• Figure 20: Product design - Structured products / trades example
• Figure 21: Componentization and component-based approaches in the middle and back office