Financial firms are doubling their annual technology spend to cope with the increasing pressures handling the surge in the volume of market data.
A new report from independent market analyst Datamonitor, The Growing Significance of Market Data within Financial Markets, investigates the technologies demanded by the financial markets industry.
It says European and US hedge fund and fund management firms' expenditure (buy side firms) on front office market data infrastructure is set to reach US$484m by 2009.
Total European and US financial services industry front office market data IT expenditure is currently $2.1bn, with an increase expected on market data storage in 2008.
Study author and Datamonitor financial services technology analyst Amit Shah says incoming regulations including MiFID and the Regulation National Market System in the US could lead to immense pressures for accuracy and transparency.
Shah cites market data as the ‘fuel’ for algorithmic trading models.
"As automated trading becomes increasingly cross-asset, so too must storage and analytic platforms to support cross-asset, next generation trading," he says.
"Although some within the industry would argue this is straightforward, it is a complex process to provide these high performance tools and meet the challenges of integrating the data."
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