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By Michael Eggebrecht
In the face of reduced budgets, cloud computing will soon have a major impact on Wall Street, according to a survey of IT professionals.
Forty-six percent of the 103 respondents who work for brokers or large banks expect cloud computing to cause significant business changes, up from 21 percent in 2008. The survey, which was conducted by IBM and the Securities Industry & Financial Markets Association (Sifma) in May, was released today at the Sifma Technology Management Conference in New York.
"With the kinds of challenges Wall Street firms face, a trend towards cloud computing might be expected," said Ian Hurst, general manager of IBM's financial services business, in a statement. Staffing, implementation costs, and the disconnect between IT and business rank as firms' main internal challenges, said Hurst. "Cloud computing specifically addresses each of these with compelling economics, self-service and virtualization."
Despite the industry's increased focus on risk, operational risk modeling technologies placed second, at 42 percent, trailed by mobile technologies, with 36 percent. Those percentages changed little from the prior year's survey.
However, together those three technologies will help firms deal with the ever growing volumes of data generated and consumed by market participants, said Hurst: "Firms need to capitalize on the latest technologies such as cloud computing to better manage all this data; operational risk modeling and analytics to assess it and turn it into market insight; and then mobile technologies to place it in the hands of the decision makers, wherever they are."
Ninety percent of broker and bank participants said that economic uncertainty is likely to stand in the way of implementing their IT strategies, up from 67 percent in 2008. Short-term earnings pressure was identified by 58 percent as a potential stumbling block.
The waves of layoffs that have marred the sector are also affecting IT plans. Insufficient staffing will pose a major obstacle in carrying out IT projects, said 78 percent of respondents. That number stood at 56 percent in 2008. "With the present focus on cost-cutting initiatives and on survival rather than growth, it was not surprising to hear that IT teams are understaffed," says the report.
Still, 32 percent said that their IT budget will increase next year; 33 percent see it remaining the same, while 17 percent expect a dip. In comparison, only 20 percent saw their budget increase in 2009, while 42 percent had to deal with fewer funds.
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