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Wall Street & Technology’s 2009 Capital Markets Outlook

WS&T's editors look at the year ahead and present visions for 11 areas where change may come in 2009.

After a rough year, Wall Street is looking to put 2008 behind it. In 2009 CIOs will be working with smaller budgets but will face many of the same challenges they have had in years past. At the top of the priority list will be improving risk management technology, providing technology support for compliance with new regulations, and improving collateral management technology. Wall Street & Technology's 2009 Capital Markets Outlook offers some insights for the coming year.

What phrase would best capture 2008 on Wall Street? Train wreck? Implosion? Both seem appropriate to describe the year that brought us the mortgage, CDO and CDS meltdowns; Bear Stearns' collapse; Lehman's bankruptcy; panic in the global financial markets; and a seemingly endless succession of layoffs (150,000 U.S. financial sector jobs lost between September and early December alone, according to Reuters). It's no wonder everyone thinks 2009 can't get here fast enough.

But when the new year does arrive, much uncertainty will remain. CIOs will certainly be asked to do more with less. And we can expect the turmoil will force Wall Street firms to invest in a few key technology areas.

Many firms will take a hard look at their risk operations and policies as they recover from their past CDO and CDS indiscretions, and many will realize the need to invest in new risk management technology. Further, it is inevitable that at least a few new regulations will hit the Street in 2009, making investment in new compliance tools necessary. And as firms struggle to get a grip on counterparty risk, collateral management automation projects will become a priority.

When it comes to staffing and IT budgeting, in efforts to cut costs without axing employees, platform consolidation and technology rationalization will become the norm. "Right now management attention is focused on rationalizing infrastructure, whereas in the past four to five years it's been about figuring out how to grow the business and not being left behind competitors," notes David Easthope, senior analyst at Celent. And for the thousands who are unfortunate enough to lose their jobs, social networking technology should continue to shine as Wall Streeters look for new positions.

The surge of wealth management technology initiatives seen in 2008 will probably ebb as firms learn to leverage their new platforms. Yet TowerGroup predicts that wealth management spending will be one of the few bright spots in financial services IT spending, pointing to client reporting software as an area of likely investment.

Wall Street & Technology's Penny Crosman, Melanie Rodier, Ivy Schmerken and Greg MacSweeney contributed to the 2009 Capital Markets Outlook.

The Outlook












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