Credit Suisse has made an announcement regarding its funding activity to the software marketplace for investment banking and hedge fund software . It has been done by a bank with the purpose of reducing the spiralling technology costs of different sectors.
Investment banks are under enormous pressure to cut fast-rising costs and why this is so , it will be explain by the Eco financial technology in the beginning of the next year i.e. in January, 2014. It is moving towards electronic trading and severely tighter regulations which increases IT expenses.
It was seen that cost or expenses related to IT or their platform are one of the great problem for the top bankers and to resolve this issue Credit Suisse is offering or providing finance through a specialised app store as this app would allow banks, hedge funds and software companies to sell banking-related software that they have developed to their peers. Its main goal is to reduce the burden on them related to cost.
We are very grateful to the banks’ mutual animosities and a long tradition of bespoke software, as it provide good result otherwise earlier other efforts are also made to reduce the cost related to technology by sharing it through joint ventures, partnerships and open-source projects or through some other method, but unfortunately all are failed.
Every year JPMorgan or Deutsche Bank who are the large investment banks incurred expenditure of several billion dollars on technology and many of them have moved some IT centres to low-cost countries and reduce the staff in numbers.
But all this is not sufficient to reduce the costs. In the last three years, the software used to monitor risk, expenses on it also shot up by 50 percent and this is known as per the estimates by McKinsey, the consultancy.
If we compare the no. of software with banks with those of the software ompanies, then banks have more quantity as they are having thousands of apps each and they are also searching for the ways to build fewer and monetise those that they do invest in.
According to the few software experts, it is known that banks are trying to commercialise their software from last several years and they are doing this because they want to prove themselves as too specialised to transfer easily on to another bank’s platform.
The main fact behind all this that banks have to become more like technology companies.
Eco had a number of interested companies ,are expecting that its first transaction will be done after its opening in Jan, 2014 and with this thus aims to secure further funding from banks, hedge funds and software companies in the second half of next year to widen its investor base.