Although the financial services market is, in some ways at the forefront of technology adoption, important barriers...
November 27, 2003
Although the financial services market is, in some ways at the forefront of technology adoption, important barriers are limiting growth in this vertical industry, according to In-Stat/MDR.
The high-tech market research firm finds that while this market experiences a critical need for reliability and performance, it is hindered by its extremely cautious approach to IT spending and network implementation.
The financial services vertical is, in many ways, very similar to other verticals, in terms of their networking and connectivity needs-there is an increasing demand for faster, more reliable, more secure access to both internal and external information, the firm said. In addition to this, the industry must meet rigid service levels and, thus, the network must be available.
However, according to Amy Cravens, a senior analyst with In-Stat/MDR, this industry is focused on total cost of operation and demands a proven return on investment, partially due to the tremendous pressure on capital and operating expenses.
While financial institutions are working toward better communication networks, this goal is being pursued in an extremely cost-sensitive light. The financial services market has suffered from the economic downturn, which has severely impacted many institutions’ performance. As a result, technology spending in this industry has changed.
In-Stat/MDR has also found that:
* The backbone environment in financial institutions has largely migrated to higher bandwidth technologies, with relatively few organizations currently relying on 10 Mbps shared Ethernet and the majority migrating to Fast Ethernet, or even Gigabit Ethernet, in some instances. While Gigabit Ethernet is still relatively rare at the network edge, many organizations are using this higher-speed technology in the network core.
* While the financial services market may drag in switch shipments, this market is at the leading edge of security. Security solution shipments to the financial services market will experience healthy growth over the forecasted period (2001-2007).