BUSINESS
Irish firms eye non-compliant UK banks
25-11-2004
by
Irish software companies selling into the UK financial services market can broaden the appeal of their products by addressing customers' compliance needs.
This was one of the key findings of a new report commissioned by the UK offices of Enterprise Ireland, which surveyed 35 decision-makers in UK financial institutions. The report found that high street banks in the UK are spending between 20 percent and 50 percent of their 2004 regulatory compliance budget on IT, a figure that is likely to increase by 10 percent in 2005. The survey also found that investment banks and insurance companies are spending between 10 percent and 40 percent of their compliance budget on IT.
The discrepancy between the financial institutions reflects the fact that banks have a more centralised compliance model, by comparison with investment banks where compliance issues are dealt with on a regional or departmental level.
"We recognised what an important driver compliance was and saw an opportunity for our clients," said Judi Blackmur, senior advisor, with Enterprise Ireland speaking to ElectricNews.net. "Companies already selling into the industry can broaden their value proposition."
IT was the second most important factor in the compliance budget. Training and education received between 50 percent and 70 percent of the budget in banks and between 40 percent and 80 percent of the budget in investment banks and insurance companies.
The prioritisation of compliance creates an opportunity for companies selling business process or workflow software, since it can also be used for compliance purposes, by providing tracking, analytical and reporting functionality.
Compliance with the major regulatory measures -- such as Basel II, the International Financial Reporting Standards (IFRS) and anti-money laundering legislation -- are extremely important to financial institutions. The Sarbanes-Oxley legislation is important to financial services providers with a US presence. Sarbanes-Oxley was introduce in the US in the wake of the Enron and WorldCom scandals, to improve the standards of corporate governance in companies located in the US, or US-owned companies worldwide.
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