During the first few months of 2009, many financial services executives believed that it would be a lost year -- most expected the markets to continue to tumble, or at best tread water, and anticipated more bank failures, job losses and pain. 2010 couldn't get here fast enough.

In the end, 2009 surprised everyone. Since March the financial markets have been on one of the strongest bull runs in history. Many financial firms have returned to profitability, and some are reporting near-record profits. Still, the global economy is only limping along, job losses continue to mount across financial services and almost every other sector, and banks continue to fail (more banks failed in 2009 than in 2008).

So 2009's mixed bag leaves many in the industry scratching their heads when it comes to predicting what will happen in 2010. The uncertainty likely will limit increases in technology spending, though budgets shouldn't be as tight as they have been. New regulations designed to protect investors and secure the economy are just starting to take shape and surely will be front-page news for most of the coming year. And hiring likely will remain slow, except for in certain specialties, such as risk management, quantitative analytics and the trading of multiple asset classes.

So at the top of most CIOs' 2010 priority lists will be dealing with regulatory reform and improving risk management, as well as efficiency initiatives. Wall Street & Technology's Capital Markets Outlook 2010 offers some valuable insight into these goals and other priorities for the coming year.

As companies keep a tight lid on costs and the technologies mature, the use of hosted software and cloud computing will continue to increase on the Street next year. Hosted software can provide cost savings and enable faster time to market than in-house deployed technology. And cloud computing is gaining acceptance as providers increase security and many large financial institutions create private, internal clouds.

In the front office the use of dark pools and high-frequency trading (HFT) will continue to attract attention, and regulators will explore further the value they provide to the market. Although HFT and dark pools are not new market innovations, politicians and regulators have focused on them as they seek to restore investor confidence.

Investors, meanwhile, aren't waiting for regulators -- they're demanding more transparency from asset managers and hedge funds now. Similarly, investors are demanding improved risk management procedures. And in order to attract and retain investors, many hedge funds are automating reporting processes and increasing transparency into operations.

These trends, along with an increased use of business intelligence, changes in the clearing of OTC derivatives and the adoption of social networking technologies, will shape many banks' 2010 technology strategies and spending.