MiFID driving software and services outsourcing

The need for companies to comply with the EU's update to investment banking regulations, the Markets in Financial Instruments Directive (MiFID), which is due to come into force on 1 November, is driving software and services outsourcing in the sector.

Consultancy Pierre Audoin Consultants (PAC) says data requirements around MiFID - such as the need to collect, consolidate and publish information from diverse sources in near real-time, and also storage requirements - has significant IT implications which is leading to increased outsourcing activity.

But it is not just compliance-related outsourcing that is in demand: MiFID is also fuelling outsourcing of non-core business processes, according to PAC, as companies seek to concentrate their in-house resources on more pressing matters as the 1 November deadline approaches.

MiFID will also impact outsourcing contracts, said PAC, as companies will have to ensure their outsourcing providers are in compliance.

PAC predicts overall core software and IT services in the banking sector will grow nine per cent in 2007. It also envisages a strong IT investment pattern through to next year as companies seek to complete projects sparked by the new regulations.