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Mideast Firms Continue IT Investment
Published Jun 22, 2009
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Regional banks and financial trading companies in the Middle East have not cut back on technology investments directed towards creating electronic trading platforms and enhancing front office trading.
Richard Bentley, Vice-President, Field Technical Services at Progress Software, told Emirates Business: "Technology spending was focused more on front office trading and was more of a protected spend.
These investments are about 10 per cent of the total budget and relevant in the long-term plans of the company.
A lot of MNC banks and financial corporations are also showing interest in moving trading operations to the Middle East.
They want to offer brokerage services and this is one area Progress will focus on, as regional banks will talk to these front offices.
The US-based Progress Software provides application infrastructure software for the development, deployment, integration and management of business applications, and recently made its entry into the Middle East.
Though organisations here are making technology investments in electronic trading, it is still at a very nascent stage, said Bentley.
"There is sophistication in the market and as banks start trading on multiple exchanges, the relevance of electronic trading increases.
Competition has also increased among regional exchanges and, therefore, there is a drive to provide access.
In terms of size, Saudi Arabia is the biggest, followed by Dubai, Abu Dhabi and Kuwait.
Bentley said: "The main challenge in electronic trading was the access given to foreign investors, but it is better now.
Liquidity has improved and there are instruments available for clients to trade in the local market.
Regulatory inhibitions have also broken down.
In terms of market size, fund management is considered to be worth $1 trillion (Dh3.67trn) in the Middle East, while the electronically traded assets are still small.
The Saudi asset market is worth $300m, which says a lot.
Though there are investments happening, there is a lack of education, according to Bentley.
"Progress will also look at providing education to local banks on trading technologies.
There is a definite interest and we want to work with partners.
For multiple country trading, an investment has to be made and brokers are playing a critical role here.
They are providing hosted financial services and Progress is looking at working with them and offering our services.
Banks and trading companies can get access to technology without upsetting their current infrastructure.
A lot of organisations are also beginning to realise that the basic IT systems have to be kept updated, as the financial workforce is getting increasingly mobile.
"Employees are working with a number of institutions. Therefore, asset companies are beginning to realise the importance of IT systems," said Bentley.
Globally, Progress Software has 120 customers.
It will be setting up base in Saudi Arabia soon but has not yet ventured into the Chinese market.
Posted by
VMD - [Virtual Marketing Department]
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