The need to integrate complex, heterogeneous systems, the movement to T+1 processing, and financial document preparation is spurring adoption of XML by financial Services enterprises, according to a report by ZapThink, an XML-focused industry analyst group.
The financial services sector will spend $985 million on XML technologies in 2002. That's projected to grow to over $8.3 billion by 2005, the report said.
The Extensible Markup Language (XML) is supporting a wide range of critical business functions, including enterprise and B2B integration, financial document publishing, distribution, and syndication, and risk management. XML is also a key technology supporting Straight-Through Processing (STP) efforts and the movement to next-day or T+1 trade settlement times.
"The financial services sector has long been an early adopter of emerging IT technologies," said Ronald Schmelzer, senior analyst at ZapThink. "XML is a key part of their long term strategy to lower operating cost, increase customer satisfaction and revenue, and meet critical business goals such as T+1 and efficient financial document publication."
Other key findings of the report include:
FSPs will seek to implement integration-centric XML approaches first, and content-management approaches second.
The industry's focus on STP and integration challenges will constrict IT budgets to XML solutions that specifically address these points.
Budgets for XML-based projects will greatly expand in late 2002 and 2003.
XML-based content management and single-source publishing can reduce up to 75% of total publishing cost.
Toolset immaturity and the impact of B2B and Web Services standards will impact integration efforts and possibly make some XML specification efforts redundant.
Financial services companies should seek to implement XML and Service-Oriented Integration to simplify STP and integration projects.
Financial service companies will need to have significant resources to invest in XML-based tools and technologies in 2002, although these needs will drop off in late 2003 as tools and technologies mature.