IT Spending in the US Securities Industry 2005: The Coming Contraction

While IT spending in 2004 and 2005 started to grow again, Celent's latest report predicts that in the years ahead, the securities industry will actually curtail its IT investments.

According to the latest report from Celent, an increasing number of securities firms are seeking to rationalize and streamline their IT architectures. Projects to re-architect systems environments and consolidate on fewer platforms are gaining steam. Since these projects tend to be longer term, it will be some time before securities firms are able to reap the rewards from these investments.

According to Octavio Marenzi, CEO of Celent and author of the study, "Contrary to the conventional wisdom, we do not believe that IT spending in the securities industry will continue to rise at a constant, monotonic rate into the foreseeable future. Rather, we anticipate a reduction in IT spending in 2008 and 2009. The major reason for this is not poor business prospects, but the increasing number of firms engaged in consolidation projects and seeking to rationalize their IT architectures."

This report examines the major business trends and technology issues and the implications of IT consolidation projects. It provides a breakdown of spending for US securities firms for 2005.Two firms, Merrill Lynch and Morgan Stanley, stand out as spending more than US$2 billion each.

A table of contents for the report is available online.

of Celent Communications' Institutional Securities & Investments and Retail Securities & Investments research services can download the report electronically by clicking on the icon to the left. Non-members should contact info@celent.com for more information.