European Banks Make the Shift to Third-Party IT Solutions

Financial News, October 13, 2002 | Go to article overview

European Banks Make the Shift to Third-Party IT Solutions


Deutsche Bank, UBS Warburg, HSBC and ABN Amro will spend more than any other European banks on information technology, according to a new report from consulting firm Celent Communications.Deutsche Bank will top the list with [euro]3.1bn, while UBS Warburg and HSBC will spend [euro]2.8bn each and ABN Amro will spend [euro]2.3bn.

Spending by commercial banks in the European Union will total [euro]45.8bn ($44.9bn) this year - approximately 23% more than the [euro]37.1bn spent by US commercial banks.

Information technology spending consists of outlays on hardware, software and technology-related services.

It encompasses expenses for internal and external technology activities, including spending on the management and operation of data centres, hardware and software development, third-party licensing fees, professional fees to contractors and vendor-supplied technologists, internal technology staff and their management, fees paid to outsourcers and any other expenditure on IT or IT management.

It is at the heart of fierce debate among banks' board members, who are fighting to keep down costs in a bear market.

On the one hand, technology is often the most expensive item on a company's balance sheet and so rationalisation offers quick cost savings. On the other hand, its adoption provides a sensible way to cut headcount and improve efficiency, both of which offer huge cost savings after the initial outlay.

Last week, US bank Merrill Lynch abandoned trading in 75% of the lowest volume Nasdaq stocks and cut trading staff, while two of its competitors increased the number of stocks on their books by adopting improved technology. It was an embarrassing about-turn for Merrill Lynch after its decision two years ago to buy Herzog Heine Geduld, the Nasdaq market maker.

Credit Suisse First Boston and Salomon Smith Barney also slashed the number of Nasdaq stocks they trade.

However, JP Morgan and Morgan Stanley have increased the number of Nasdaq stocks they trade by boosting their use of technology, rather than by raising staff numbers.

While the extra 7,000 or so stocks might not be consistently profitable, the cost of keeping them on the books is low as few staff are involved.

Banks in Europe are looking at ways to make cross-border settlement and payments processing cheaper in response to pressure from clients to lower trading costs.

This is prompting interest in joining central-matching utilities such as Omgeo, the network owned by Thomson Financial and the Depository Trust & Clearing Corporation, as well as encouraging banks to adopt technology to automate back-office processes and reduce manual intervention. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

European Banks Make the Shift to Third-Party IT Solutions
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.