IT Spending in the Japanese Securities Industry

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21 November 2005
Neil Katkov


Tokyo, Japan November 21, 2005

Japanese Market Recovery Giving Heavy Boost To Securities Industry IT Spending

Japan痴 market recovery is gaining force, with trading soaring to record levels in recent months. The Japanese securities industry, enjoying higher revenues but facing intractable competitive and compliance issues, will boost spending on information technology from US$2.84 billion for the year ending March 2006 to US$3.47 billion in March 2008, a robust 10.5% compounded annual growth rate over this period.

These are heady times for Japan's securities markets. The unsteady recovery of the past few years seems to have suddenly found its legs and leapt into record trading levels in September and October 2005. Buoyed by this resurgence, securities firms posted solid revenue and profit growth for the September 2005 mid-term results. Celent痴 new report, " ", describes how the industry's return to profitability and business and regulatory pressures are combining to drive expanded spending on information technology.

Business models in the industry are changing, with new marketing channels擁ncluding online brokerage and third party distribution through banks and other businesses葉hreatening to disrupt the traditional full-service brokerage's dominance of the market. The securities industry is also seeing increased competition from other financial services sectors, as banks and insurance firms begin to implement wealth management-style marketing strategies in order to vie for a greater share of individual investor assets. On the institutional side, securities firms are adopting advanced technologies such as algorithmic trading in the front office and continuing to build straight-through processing capabilities in the back office. Firms will also soon be facing a range of compliance requirements, including expected regulations governing financial transparency and business continuity planning.

"Constrained by poor profitability during the years of the market downturn, is now being buoyed by improved earnings due to the recovery," states Neil Katkov, manager of Celent痴 Asia Research group and author of the report. "Firms will be investing more in new technologies and products as they strive to enhance their competitiveness and maximize the opportunities presented by the revived market."

In addition to Celent's analysis of technology spending trends in the Japanese securities industry, the report provides an overview of the industry痴 institutional structure as well as key issues facing retail and institutional brokerage. The report also introduces the major domestic suppliers of brokerage systems and their respective market shares. The report concludes with a consideration of emerging issues that will influence technology trends in the Japanese securities industry in the years to come.

The 30-page report contains 21 figures and 1 table. A table of contents is available here.

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Insight details

Capital Markets, Wealth Management
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Capital Markets
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Geographic Focus
Asia-Pacific, EMEA, LATAM, North America