Securities firms Web spending is much, much more than expected (note today's story, below - very interesting) - I hope to hear that much of this revenue will be also devoted to internet security co.s, such as SCUR, as well.
JL
(COMTEX) B: U.S. SECURITIES FIRMS' WEB SPENDING INCREASES 13 TIMES TO 21% OF TOTAL IT BUDGET FIFTY PERCENT OF RETAIL ORDERS WILL BE RECEIVED Electronically By 2001,
TowerGroup/SIA Survey Shows
NEEDHAM, Mass., Jun 23, 1999 /PRNewswire via COMTEX/ -- Firms'
investment in their information technology platforms is increasing at a faster pace than originally anticipated as firms prepare for increased demand for on-line trading. According to preliminary results of a study released last week, spending on internet, intranet, and extranet technology will account for 37 percent of firms' total IT budgets by 2002, as compared with three percent in 1996.
"The shift in IT spending to internet/intranet/extranet is occurring
more rapidly than the IT professionals we surveyed in 1996 predicted,"
said Larry Tabb, securities and investments research director at
TowerGroup, which conducted the survey for SIA. "Then, they estimated
that it would be 17 percent of the total budget by 2000; it already
reached 21 percent in 1998."
This is driven by the surge in Internet trading. Respondents predicted
that 50 percent of their retail client orders for mutual funds and
equities will be received electronically by December 2000, as compared
with 20 percent in 1998. "Firms are looking beyond Year 2000 and
realizing that demands for larger IT budgets and staffs will continue," said SIA President Marc E. Lackritz. "We can expect that in 2002 one out of every eight employees inthe securities industry will be involved in information technology."
And an increasing percentage of those employees will be dedicated to
working on the internet. "The number of IT staff working on
internet-related projects will grow at an annual compound growth rate
of 25.5 percent between 1998 and 2002," said Tabb.
Firms will also be preparing for the transition to T+1. "While they
don't see this as demanding as much time and effort as Year 2000, firms are definitely allocating resources for this project," says Tabb. "They see this and straight-through processing as positive moves to reduce risk and streamline their operations."
Total IT budgets, which soared from $11.5 billion in 1996 to $18.4
billion in 1998, a 26.5 compound annual growth rate, will continue to
increase tomeet these demands, though at a slower pace. Total spending
on IT is estimated to increase 7.1 percent each year from 1998 to reach $24.2 billion in 2002.
The survey was sent in early May to approximately 250 firms, including
eight of the top 12. The responding firms represent 30 percent of the
total securities industry employment, and 30 percent of the estimated
technology spending. For the survey, firms were categorized by the
number of employees as large (more than 4,500 employees), medium
(between 500 and 4,000 employees), and small (fewer than 500
employees).
Detailed results of the survey will be available from TowerGroup in
September.
TowerGroup (http://www.towergroup.com) is a research, advisory, and
consulting firm specializing in the alignment of business and
information technology strategies in the global financial services
industry. TowerGroup conducts proprietary consulting projects and
research on banking, securities, and insurance information systems
technologies, products, vendors, markets, investment trends, and
issues. TowerGroup serves a global client base, including some of the
largest financial, technology, and management consulting firms in the
world.
The Securities Industry Association (http://www.sia.com) brings
together the shared interests of more than 740 securities firms to
accomplish common goals. SIA member-firms (including investment banks,
broker-dealers, and mutual fund companies) are active in all U.S. and
foreign markets and inall phases of corporate and public finance. The
U.S. securities industry manages the accounts of more than 50-million
investors directly and tens of millions of investors indirectly through
corporate, thrift, and pension plans. The industry generates more than
$300 billion of revenues yearly in the U.S. economy and employs more
than 600,000 individuals.
SOURCE TowerGroup
(C) 1999 PR Newswire. All rights reserved.
prnewswire.com -0-
CONTACT: Sandra Kowalski of, TowerGroup, 781-292-5298,
sandra.kowalski@towergroup.com, or James D. Spellman,
jspellman@sia.com, or
Dan Michaelis, dmichaelis@sia.com, 202-296-9410, or
Margaret Draper of
212-618-0531, mdraper@sia.com, all of SIA
WEB PAGE: towergroup.com
sia.com
*** end of story ***
|
