Compliance Drives Retail Bank IT Spending

Monday 31 January 2005 18:51 CET | News

US banks will spend $2.6 billion, or 4.2 percent of total IT budgets, to enable compliance with changing regulatory requirements, according to a new study, that found more than 80 percent confirmed it was the most important driver of core systems investment in 2005.

This is up from 2004, when 3.8 percent of total IT spending went toward compliance initiatives. Spending will continue to grow in 2006 when compliance is expected to eat up 4.6 percent of the total IT budget. The study, US Retail Banking Technology Spending, conducted by Datamonitor, presents the views of 100 IT decision makers to identify strategy drivers for 2005. “The wave of banking regulation enacted over the past several years is exacting a heavy operational and cost tool on the US banking industry,” said Edward Blomquist, financial services technology analyst at Datamonitor and author of the study. “Efforts to comply have supplanted core operations and branch renewal as leading concerns of both business and IT managers.” According to Blomquist, legislation such as the Patriot Act of 2001, the Sarbanes-Oxley Act of 2002, the Fair and the Basel II accord have forced banks to exert greater control on everything from consumer privacy, credit and identity theft, corporate corruption and risk management. The study also pointed out banks are finding ad hoc solutions inadequate and are looking for ways to integrate compliance within their IT strategies.

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Categories: Payments & Commerce | Payments General
Countries: World
This article is part of category

Payments & Commerce