Keeping up with regulatory requirements is the greatest challenge facing CIOs in the financial services sector, but alarmingly few are taking steps to address the problem.
Regulatory compliance came top of a list of 13 issues likely to pose a serious challenge to financial services CIOs and their strategies over the next two years, according to research from publishing group MIS UK. Yet, only 2.5% of the key projects keeping financial services IT departments busy during 2003 relate to regulatory compliance.
Caroline Birrell, Managing Editor of MIS UK Editorial & Research Projects, comments:
“CIOs in financial services are under huge pressure to keep up with the many regulations with which they have to comply, both at EU level and globally.
“As the research shows, they understand the need to focus on making sure all IT operations and processes are stable, secure and adhere to regulatory requirements like Basel II, the Money Laundering Regulations 2003 and the International Accounting Standards.
“Worryingly, though, the majority of respondents are not dealing with the problem now, and many do not even have clear risk-management plans in place for the future. With the deadline for Basel II compliance less than three years away, financial services CIOs can ill-afford to put their heads in the sand.”
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Notes to editors:
· The research forms part of Financial Services Industry Intelligence 2003, which is produced by Fairfax Business Research, the market intelligence arm of MIS UK magazine.
· The report was based on telephone interviews with 91 senior IT decision-makers working in wholesale/retail banking, insurance, financial management, asset management and services to banking and insurance firms. To qualify for the survey organisations had to employ at least 250 staff.
· The research was conducted throughout March, April and May 2003.
· 66% of respondents are the most senior IT person for their company within the UK and/or other parts of the world. 34% report to a UK-based IT executive.
· Basel II is the global financial accord that determines the regulation of financial markets. Due to come into effect in 2006 and regulated in the UK by the FSA, Basel II stipulates that a bank’s regulatory capital adequacy requirement be based not just on credit and market risk but also on operational risk. According to the Basel Committee, operational risk is defined as a direct or indirect loss resulting from inadequate or failed internal processes, people and systems, or external events, such as a terrorist attack.
About MIS UK
The MIS UK business incorporates MIS UK magazine, a monthly journal targeted at the most senior IT decision-makers in the UK’s largest technology-spending organisations, and Fairfax Business Research, producer of the MIS MarketBase databases and MIS MarketTrends demand-side research reports. MIS UK is owned by Fairfax Business Media, a division of John Fairfax Holdings, which publishes the Sydney Morning Herald, the Australian Financial Review, BRW, CFO, Shares and Personal Investor among other newspapers and magazines.
For more information about Financial Services Industry Intelligence 2003 or to arrange an interview with an MIS UK spokesperson, please contact:
020 7688 3482
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