Capital Markets Predictions: Regulation, Cloud Services and Emerging Markets dominant themes in 2010
“In the aftermath of the economic crisis and with greater scrutiny placed on financial institutions, 2010 will see a dramatic uptake in the use of technology for regulatory compliance and enforcement,” said Dr. John Bates, founder and general manager of the Apama division of Progress Software. “Market participants will be forced to deploy better trade monitoring systems particularly as the debate over the use of high frequency trading rumbles on. Dark pools will be forced to become more open and regulators will take a greater interest in examining everything from policing trading in real time to the use of social media within trading.”
Progress Software also forecasts that firms pursuing a more ‘plug and play’ style of technology adoption by leveraging software platforms hosted “In-the-Cloud” will become mainstream in 2010. This model, known as Software as a Service (SaaS), will level the playing field enabling smaller upfront investments and a move away from “on premise” deployments.
Bates added, “We will see hosted services for algorithmic trading and risk management become the major method of deployment. Hedge funds in particular will be key adopters of hosted trading systems as a way of dealing with the operational and cost challenges caused by the financial crisis.”
“Hosted platforms remove the technology burdens and maintenance issues from fund managers, allowing them to focus on making money. As such, this model will become increasingly popular with firms looking to get a piece of the high frequency trading pie.”
2010 will also be the year emerging markets such as Brazil, India and China become growing forces in global trading circles, with high growth rates as they begin to scale up adoption of algorithmic trading technology and increase interest in cross-border trading strategies. For example, the Brazilian exchange, BM&FBOVESPA, opened a London office as part of a push to encourage greater foreign participation in its rapidly-growing electronically-driven equities and derivatives markets.
“Over the last six months, markets such as those in South America have been growing at a phenomenal pace and show no sign of slowing,” Bates continued. “We expect this to carry throughout the next 12 months at least as more firms turn to algorithmic trading. The fast growing economies of India and China also are beginning to adopt advanced trading technologies aggressively.”
“2009 was certainly a tough year for many financial institutions. While 2010 holds some promise, firms that set themselves up to cope with the ever changing regulatory landscape coupled with the increasing global commercial competition that will get ahead.”
About Progress Software Corporation
Progress Software Corporation (NASDAQ: PRGS) is an independent enterprise software company that enables businesses to be operationally responsive to changing conditions and customer interactions as they occur – to capitalize on new opportunities, drive greater efficiencies and reduce risk. The company offers a comprehensive portfolio of best-in-class enterprise software spanning event-driven visibility and real-time response, open integration, data access and integration, and application development and deployment – all supporting on-premises and SaaS/Cloud deployments. Progress maximizes the benefits of operational responsiveness while minimizing IT complexity and total cost of ownership. Progress can be reached at www.progress.com.