Financial Crisis Prompts More Data-Integration Spending

Loraine Lawson

Data-integration spending in the financial sector will grow approximately 5 percent over the next two years, fueled primarily by data issues brought to light during the recent financial crisis, according to a recent report by The Aite Group, a Boston-based research firm.


This year alone, financial firms will spend $1.76 billion on costs related to data integration (personnel, hardware and software), according to the report commissioned by Asset Control, a data-management software firm. That's actually slightly less than financial firms spent in 2007, but more than the approximately $1.68 billion they've spent over the past two years.


The report estimates financial services global spending on data integration will reach $2 billion by 2012.


The IT market throws around a lot of big numbers-after all, Gartner recently predicted worldwide IT spending will reach $3.4 trillion this year. The problem with large numbers is that it's difficult to really register their significance. Oddly, I'm having trouble locating a worldwide figure for data integration (anybody?), but to give you a somewhat relevant comparison, last year's revenue in the application infrastructure and middleware (AIM) software market was $15.9 billion worldwide, according to Gartner.


I looked up the full report "Integration: Data Management's Last Mile," on Asset Control's website. You can download it for free if you're willing to register on the site. The Aite Group makes it pretty clear this spending is tied to the financial credit crisis:

The credit crisis and ensuing lack of industry transparency brought the need for effective data management to the forefront. The industry's collective inability to understand and report on risk exposure quickly and correctly is tied to a lack of data, and not simply a failure of the systems themselves.

The report also lists how much companies will spend based on size:

  • Tier One bulge-bracket brokerage or global bank: $7 million to $23 million.
  • Tier Two midsized asset manager and larger hedge funds: $3 million to $4 million.
  • Tier Three asset manager or hedge fund: $250,000 to $500,000.


Let's hope that spending buys success. As IT Business Edge's Ann All and Gartner analyst Karen Moyer noted last year, banks don't have the best track record when it comes to handling data integration.


If you don't want to read the full report, Information Management published a nice summary. The article also notes that the report was released on the same day Asset Control announced the launch of a new integration tool.

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