Which areas of financial services IT are set to surge in the year to come?

The buy-side
Generically, one of the areas tipped for a resurgence in the coming year is buy-side technology. In particular, asset managers are expected to up their investment in risk management software as their exposure to complex securities increases.
“As the buy-side takes on more short and derivatives positions, it will need tools to better analyse and manage them,” says Larry Tabb, financial analyst at the TABB Group.

Exchanges
MiFID has freed up the market for new cross-border electronic stock exchanges like Chi-X, Virt-X and Project Turquoise, and next year promises further consolidation and new entrants to the market.

While some may fall by the wayside and others be swallowed up by larger rivals, all will need technologists to develop and run the projects.

Simon Walker, managing director of financial IT recruitment firm Project Partners, says: “We’re getting a sense of increased demand from the exchanges for tactical development specialists, project managers and business analysts.”

Insurance
It was hot last year, and we predict the insurance sector will remain a steamy place for techies in 2008.

Insurers still have a lot of legacy systems in place, and are rolling out new projects for 2008, says Chris Potter, technology assurance partner at PricewaterhouseCoopers. He says: “The biggest demand of all is for business analysts who both understand the sector and the regulatory environment, which is a rare skill-set combination.”

Risk
With sub-prime related write-downs now approaching $50bn, you might have thought some fingers might start precariously pointing towards the quants and quant developers who built the pricing models. Instead, their talents are once again being coveted, albeit with a different focus.

Laurie Boyall, managing director of financial IT recruiters McGregor Boyall, says: “Even though some of the quant models may have got it wrong, unwinding some of these positions and rebuilding risk models is perhaps even more demanding than it was when things were going well.”

Paul Thoma, managing director of financial IT recruitment firm Garthorne Associates, adds: “A growth area next year will be to more effectively manage and produce systems that can more accurately provide data on a daily basis on what these structures are actually worth.”

The eFinancialCareers editorial team is taking a protracted Christmas break. We will be back in full force on January 8th. Happy New Year!