Efforts to control systemic risk are likely to be the biggest drivers of technology spending on Wall Street, according to a new survey from the Securities Industry and Financial Markets Association and IBM.

A new survey of nearly 250 business and IT Wall Street professionals found a greater focus on the development of systemic risk strategies. Of all regulatory activities, systemic risk was chosen by 55% of respondents to be the largest driver of IT investments, they reported. Risk analytics for compliance was ranked as the top analytics investment opportunity (37%) beating out analytics for client segmentation (21%) and external fraud (13%), they said. Over 90% of survey respondents expect to increase their investment in analytics over the course of the next year.

“As we noted in our recent whitepaper, the establishment of a systemic risk regulator will require a significant increase in technology resources,” said Tom Price, managing director at SIFMA. “Having the right technology in place is more essential than ever in efforts to monitor risk across firms and ensure regulators can identify and address potential problems before they escalate.”

The survey also found that almost half of respondents expect 20%-30% of their technology budget to be allocated for transformational initiatives in 2010 and 2011. Additionally, they said that concerns about the economy are waning, and firms are revisiting the use of IT to promote organizational sustainability. Key priorities include innovating processes around trading, portfolio management and risk management, they noted.

Despite the positive technology investment outlook, Wall Street professionals cite lack of IT staff and high implementation costs as the biggest inhibitors for technology implementation.

IE