IT Spending Trends in the Chinese Securities Industry

by Hua Zhang, August 11, 2009
Operations/ Benchmarking
Asia-Pacific

Abstract

The market capitalization of China's Shanghai Stock Exchange was US$1.4 trillion as of December 2008, ranking the exchange sixth in the world and second in Asia. However, as a result of the financial crisis, IT spending growth from 2009 to 2012 will remain low.

In a new report, IT Spending Trends in the Chinese Securities Industry, Celent analyzes securities IT spending in this important market. With increased development, the proportion of IT investment dedicated to hardware will continue to decline, while software and services spending will rise. Securities firms will begin to build systems for risk management, business intelligence, and CRM once centralization of systems is complete.

There is a significant relationship between the scale of IT investments in the securities industry and trading volumes in the capital markets. In 2008, the average total daily trading volume of annual stocks, funds, warrants and bonds in the Chinese securities market was 150.9 billion shares, 36% less than 2007. In addition to supporting new asset classes and financial products being provided by securities dealers, complementary business systems are an important aspect of IT applications.

"STP is one of the hot areas," says Hua Zhang, analyst with Celent’s Asia Research Group and author of the report. "With the opening up of the Chinese market, the trading process will gradually become more complex, especially when the A and B markets merge. There is a need to strengthen STP professional standards."

In the securities IT market, the top five major software manufacturers have seized 70% of the market. The main suppliers include: HiSunTech, SZKingdom, SunGard, Hundsun, and Sunyard. Other than NCR, the top 10 solutions application manufacturers in the securities industry are entirely Chinese.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

Scale of the Stock Market

IT Spending in the Securities Industry

IT Systems in Securities Industry

Suppliers and Products

Conclusions

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