(October 25 – 15:15 ET) –
Information technology spending
is accelerating rapidly in the
securities industry, according to
financial services research firm,
TowerGroup.
In a survey conducted for the
U.S. Securities Industry
Association, the TowerGroup found
that SIA members spent US$18.4
billion on IT in 1998. That’s a
26.5% jump from 1996.
TowerGroup projects that IT
spending will hit US$24.2 billion
in 2002. It concludes that the
drive to provide online trading
is behind the increase. The survey
found that about 35% of retail
trading is now done online. It
expects to see that grow to 50%
by 2002.
The Investment Dealers
Association of Canada doesn’t have
similar statistics for the
Canadian industry, although it has
published number for the retail
business. According to those IDA
numbers, IT spending in the retail
brokerage business accelerated
rapidly in 1998, from about 15%
of revenues in 1997, peaking at
about 25% of revenues in late 1998.
Yet despite all this spending
the online trading business is
comparatively underdeveloped in
Canada. Few Canadian firms have
fully developed Internet sites.
The IDA has yet to launch a site,
although its educational arms, the
Canadian Securities Institute, and
the Canadian Investor Protection
Fund, both have sites.
TowerGroup research director
Larry Tabb says that U.S. firms
focus on: creating content for
the Internet; redesigning broker
workstations; and streamlining the
transaction processing facility.
The survey was conducted in May
with 250 firms, representing about
30% of the industry.
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