New research sees improvement in risk management the focus for 2008

A series of TowerGroup research reports outlines its vision for the coming year

Massachusetts – Continued economic uncertainty will be the key business driver affecting the global securities and investments industry this year, according to a new series of TowerGroup research reports examining trends for 2008.

The uncertain environment will cause institutions to reassess and strengthen their risk management capabilities; formulating stronger IT governance strategies; developing real-time capacity/performance plans; increasing the use of derivatives; and exploiting new opportunities in emerging markets.

In the reports, securities firms are warned that if they do not embrace electronic trading, they risk falling by the wayside, whereas sell-side firms are encouraged to invest in technology projects ranging from enhanced electronic trading tools to systems for global risk modelling. Moreover, in the investment management space, the credit crunch will force the industry to further focus on portfolio and operational risk management, pushing firms to balance strategic vision with effective operational execution, says the report.

"The global securities and investments industry must continue adapting to a fast-changing environment, including grappling with the ongoing fallout of the subprime crisis and associated write-downs," said Rob Hegarty, managing director of TowerGroup's Securities & Investments practice. "The prior year served as a needed wake-up call for the industry and the firms best-positioned for this adversity will benefit in 2008."

The three TowerGroup's reports are: Top 10 Business Drivers, Strategic Responses, and IT Initiatives for Brokerage & Wealth Management; Top 10 Business Drivers, Strategic Responses, and IT Initiatives in Investment management, and Top 10 Business Drivers, Strategic Responses, and IT Initiatives in Securities & Capital Markets.