Financial institutions hurt by homegrown tech?

UK financial services organisations are being hit by downtime because of a reliance on homegrown applications, a survey has claimed.

According to a survey of 103 IT managers and senior leaders in the retail banking, investment banking and insurance sectors compiled by applications management company Managed Objects, just under a third of respondents said up to 75 per cent of their applications are homegrown.

Cheat Sheets

♦ Basel II
♦ MiFID
♦ Sarbanes-Oxley

Just under 50 per cent said their organisation has suffered at least five application outages that impacted their business in the last 12 months. Out of the three, retail banking appears to have the highest incidence of homegrown apps and related outages but investment banking appears to suffer more when outages occur. The insurance industry appears to be more stable, possibly because the product set within it is more established and requires fewer changes to the supporting applications.

The survey authors suggest complying with regulations such as Itil, Basel II and MiFID may well have caused these homegrown systems to have become over-complex.

More than 50 per cent of outages involved up to four hours of work to find and fix the problem, with the average cost to the IT department alone calculated at an average of £5,000 per hour.

Forrester principal analyst Peter O'Neill said the problem could well be accelerated by the adoption of emerging technologies such as service-oriented architectures, in which applications are made more interdependent, and virtualisation, where it may be harder to discover where apps and data actually reside, thereby making it more difficult to check when an outage occurs.