£3bn per year to be spent on trading tech

Spending on technology for financial trading is set to exceed £3bn per year, as the demand for dealer applications has risen, research suggests.

Kimsey Consulting's UK Dealing Room Survey found dealing applications now account for one-third of the annual IT budget in financial trading rooms, exceeding spending on data services.

The survey found there is increasing acceptance of voice over IP, with more than 70 per cent of respondents claiming it is suitable for a trading environment.

The survey found spending on applications was higher (32 per cent) than any other area of IT for trading floors - and was followed by market data at 29 per cent, hardware at 11 per cent, telecoms at 14 per cent and other IT at 14 per cent.

E-trading, compliance and integration will drive future growth in IT spending, the report said, as demand will increase for trading technology in lower and middle-tier companies.

In the UK trading system sector, BT and IPC were found to be the dominant vendors. The survey found there is increasing acceptance of voice over IP, with more than 70 per cent of respondents claiming it is suitable for a trading environment.

The UK market for trading technology includes around 740 trading operations and 36,000 trading positions on the sell-side, and is the largest country market for trading technology outside of the US.

Microsoft was found to be the de facto platform for traders' desktops, though alternative operating systems (including Linux) were used to some extent by around 40 per cent of the financial companies surveyed.