According to a new report from Aite Group, Event Processing (EP) applications are poised to spread from their successful niche in algorithmic trading to a variety of other capital markets functions, including transaction cost analysis.
Aite says that EP has “made an impressive showing” in the algorithmic and strategy trading areas, and EP technology is now migrating to other areas of the capital markets, such as data monitoring, compliance, Transaction Cost Analysis (TCA), risk management, proprietary data derivations, market making, and others.
Aite Group estimates that while EP vendor revenues in 2006 were just shy of US$50 million, the potential market opportunity is nearly US$1 billion by 2010 due to the expanding data rates and the increasing reliance on real-time and event-driven solutions across the capital market space.
“The Event Processing market is young, but 2006 represented an important year for vendors offering EP solutions,” says Brad Bailey, senior analyst at Aite Group and author of the report. “Its use in the algorithmic trading space helped define its direction in the capital markets. The capital markets represent a natural place for this technology, which is, fundamentally, based around the idea of processing data in a logical, temporal and ultra-fast way.”