Brokers to reduce Technology Spending

According to market researcher Celent, brokerage firms plan to cut spending on technology. The spending on technology will be reduced to an annual growth rate of merely 1.3% from 2008 to 2011, compared to a growth rate of 8.5% from 2004 to 2007.

Many new projects are going to be scrapped, and existing projects placed on hold. One area where spending will still remain strong is security as the financial industry struggles to stay ahead of online attacks.

This reduction in technology spending in the brokerage industry is reflective of the overall turmoil in the financial sector. More importantly it does not spell good news for technology providers. This dims the outlook for firms providing network equipment such as Cisco, as well as companies like Sun, HP, and Dell that provide workstations to the financial industry.