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Aite Reveals Top 10 Investment Trends

Hot topics in 2008 include OTC derivatives processing, international market fragmentation, and corporate actions processing.

Just in case your firm's IT managers aren't looking forward, Aite Group is doing it for them. The Boston-based research and advisory firm released its top 10 securities and investments trends for 2008. Among the hot topics this year will be OTC derivatives processing, international market fragmentation, data integration and aggregation, and corporate actions processing.

While industrywide enhancements have been made in processing OTC derivatives in recent years, there still is much room for improvement, according to Aite. But 2008 will see innovation in the trading, clearing and settlement of OTC derivatives across asset classes, notes the report.

Further, Aite believes the Markets in Financial Instruments Directive (MiFID) and the inevitable changes to European market structure in 2008 will receive increased attention in 2008. Specificaly, the viability of multilateral trading facilities and systematic internalizers will be under close scrutiny, the firm says.

According to Aite, the top technology priority in 2008 for Wall Street will be data integration and aggregation, with the industry spending more than $2.5 billion on enterprise data management and integration technologies, a category that is growing 20 percent a year. Aite notes, however, that many of these spending initiatives lack the flash necessary to sell to senior management and will end up pork-barrelled in other projects.

Additionally, the financial industry at large should be looking to get a handle on corporate actions processing, or what Aite calls "the last frontier in straight-through processing and risk-reduction efforts." Corporate actions departments are beginning to shed their cost center images and are being viewed as an opportunity to drive efficiency and create a competitive advantage by improving client service, the firm contends, adding that software vendors are likely to try to capitalize on this shift.

Top 10 Investment Trends For 2008

  1. Subprime Goes Prime-Time
  2. Continued Expansion of Electronic Trading
  3. Socially Responsible Investing
  4. Market Fragmentation in Europe and Asia
  5. Data Integration
  6. ETFs and Other Low-Cost Alternatives
  7. Outsourcing: All Talk Becomes a Little Action
  8. Self-Directed for Cost and Competition
  9. RIA Space Sees Double-Digit AUM Growth
  10. Corporate Actions a Legimitate Priority

Note: Trends are listed in no particular order

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