Financial Insights Releases North American Capital Markets IT Spending Estimates

FRAMINGHAM, MA – June 20, 2005 – Global independent research and advisory firm, Financial Insights, an IDC company, finds that, after the relative IT spending slowdown of the past several years, technology investments are now beginning to show some signs of acceleration across the capital markets. Based on primary interviews with many of the largest U.S. financial services firms and a survey of over 200 financial institutions, Financial Insights estimates that North American capital markets firms are planning to spend a total of US $36 billion on technology in 2005 based on their current budgets and project plans.

Included in this estimate is internal IT staff spending, as well as external spending at banks, broker/dealers, exchanges and insurance companies to support their trading and investment management operations. Financial Insights maintains its growth forecast of approximately 5% CAGR overall across the industry. This is higher than the financial services industry total growth rate of approximately 4.5% CAGR. Average technology spending by sell-side firms remains at roughly double the spending of buy-side firms. One factor to watch over the coming 12 months will be the effect that changing soft dollar policies will have on this relative spending mix. Financial Insights' dedicated Capital Markets research team will study the impact of these changes throughout the coming months.

"Consistent with the major theme of our 2005 Capital Markets Top 10, we're seeing the initiation of some larger, more strategic projects aimed at some measure of transformation around the integration of solutions and data architectures," says Jin-Chul (Gene) Kim, Senior Analyst in Financial Insights' Capital Markets Group. "Integration that impacts market presence and client-facing delivery, and ultimately revenues and margin, will change the way that capital markets firms look not only at their technology but also at their business processes. These are big projects and will certainly influence spend levels over the coming 12-24 months."

To learn more about our analysis meet with the Financial Insights' research team at the SIA Technology Management Conference in New York City, June 21-23, booth #2604. To schedule an interview in advance contact Deborah Stark, 508-935-4318 or dstark@financial-insights.com. For more information on these reports contact: sales@financial-insights.com.

About Financial Insights, an IDC Company

Financial Insights provides independent research, custom consulting, and detailed multiclient studies on the technology issues and challenges facing the financial services industry. Our global research covers topics of strategic importance to corporate and retail banks, insurance carriers, asset management firms, securities and brokerage firms. Our local practices in Asia Pacific, Latin America and Europe, and Canada add an in-depth regional viewpoint. Financial Insights, an IDC company, is headquartered in Framingham, Massachusetts, USA. IDC is a subsidiary of IDG, the world's leading IT media, research, and exposition company.

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