ISITC Survey Finds Growing Importance of Technology in 2014

In the annual member survey from ISITC (The International Securities Association for Institutional Trade Communication), the industry group found that 84% of respondents had a greater appreciation for operational and technology functions over the course of 2013.
By Jake Safane(2147484770)
In the annual member survey from ISITC (The International Securities Association for Institutional Trade Communication), the industry group found that 84% of respondents had a greater appreciation for operational and technology functions over the course of 2013.

The survey polled over 60 ISITC members, including investment managers, broker-dealers, custodians and solution providers. In addition to an increased appreciation, 80% believe their firms see benefit in increasing the technology spend in 2014.

“Firms have indicated that spending has increased specifically to prepare for and comply with global regulatory change such as derivatives clearing and reporting, AIFMD, and FATCA. Firms are also focusing efforts on data management and IBOR (investment book of record)—some in direct response to new needs created by regulatory change (e.g., LEI), others in the areas of business growth (new investments, entrance into alternatives) and risk management. We would expect to see most of the spend focused in the middle office,” said Jeff Zoller, chair of ISITC and vice president at T.Rowe Price, in an emailed statement.

Specifically, 64% of respondents expect firms to dedicate the most technology and operational resource to middle-office risk management solutions and systems in 2014. ISITC also found that 89% think the financial services industry has been either successful or somewhat successful in creating solutions and adjusting to new issues and regulation since the financial crisis. In terms of solutions that need improvement, “I can say that it has been a challenge to onboard many of the emerging solutions specific to derivatives. With tight deadlines and late/ongoing changes to the rules, the industry has struggled a bit to stay in front of this. EMIR reporting is a good example,” said Zoller.

Overall, 63% think the industry has made some progress towards improving standards by adopting best practices, but that there is still room from improvement. And in order to be successful in 2014, 34% believe reducing operational risk is the most important for measure.

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