Banking industry on target to hit compliance deadlines

The financial services industry believes it is on track to update IT systems in time to meet forthcoming regulation deadlines such as Basel II.

Almost two-thirds of respondents in a survey of risk and compliance managers said they are having to introduce new IT systems to become compliant.

But the industry is confident of meeting the deadlines with over a quarter claiming to be fully compliant already and 71 per cent saying projects are underway and will meet the deadlines. Only two per cent admitted that they were uncertain of their ability to comply with the most important regulations.

The survey of 60 managers at retail banks, insurance companies, credit card firms and investment banks was carried out by Finextra Research and sponsored by Computacenter and Sun Microsystems.

Peter Stafford, IS director at the Bank of Ireland in the UK, said compliance with legal and regulatory frameworks is one of the biggest challenges currently facing IT departments in the financial services industry.

"Technology has a massive role to play, and we have made a number of investments to help make compliance easier and less expensive," he said in the research. "For example, we have deployed imaging and tools that facilitate the extraction of information from systems, and taken steps to ensure we have access to scalable management information databases."

But Simon Gay, consultancy practice leader at Computacenter, warned the banking industry against being too over-optimistic about achieving compliance and said a wider approach needs to be taken.

"Compliance is a broader subject than just putting one or two IT systems in place to meet a particular regulatory act. We don't know the full scope of what's out there yet, so good governance is the key," he said.