Securities firms strengthen risk management budgets, says study

Current market conditions are shifting securities budgets towards risk management and trading technology, according to a Sophis survey

LONDON – The securities industry is set to increase spending on risk management. A survey by risk technology firm Sophis revealed that 57% of respondents expected budgets for trading and risk management technology to increase over the next year.

“There has been a move away from standard lending and investment frameworks in the securities finance market, and industry players must have systems that are flexible and can quickly adapt to the changing market,” said Olav Bridié, head of sales for investment banking in the UK, Ireland, Nordics and South Africa at Sophis.

The results of the survey show that investment banks and prime brokers are aware of the need to invest more to improve trade and risk management systems in order to more efficiently manage risk and cope with the growth in trading volume and speed.

The study, “The impact of current market volatility on the securities and finance market”, also revealed that over two-thirds of respondents believed current market volatility had shifted their risk management requirements, with 63% saying the past 12 months had already seen a rise in spending on risk management and trading technology.

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