A post relating to this item from Finextra:
31 March 2014 | 9465 views | 3
The resilience of bank IT systems is set to come under the regulatory microscope in 2013/2014 as the UK's Financial Conduct Authority identifies technology risk as a key area of focus for the coming y...
The prospect of a
major review by the Financial Conduct Authority into the technology risks in Financial institutions highlights the challenging regulatory environment and increased scrutiny the industry faces. This will made it tougher for these organisations to meet customer
needs, maintain profitability and increase revenues while achieving regulatory compliance. As the FCA has already identified the pace of regulatory change has traditionally involved adopting a ‘point solution’ approach to technology solutions. Whilst that
has helped to address the immediate regulatory requirement, it has also created many manual processes, layers of organisational complexity and duplication in ICT systems. The Financial Stability Board has also criticised
the approach taken by Financial Institutions. The real opportunity here is for the financial services sector to pre-empt this review and focus on how ICT can transform business operations to manage risk and achieve regulatory compliance.
However financial institutions can use the evolving regulatory environment to transform themselves into a data-centric organisation. The regulators are now demanding ‘real time’ information from financial institutions and so are the customers through new
ways of banking. Transforming towards data centricity would not only mean meeting regulatory demands but also growing customer needs, hence becoming a customer-centric organisation. We believe that from now on data will be the driving force for regulatory
compliance. Therefore compliance technology needs to be integrated in a centralised architecture to ensure meeting current and future regulatory requirements, and minimising operational costs.
This approach will create data-centric organisations that can handle compliance and risk management challenges effectively. Such a transformation will also mean greater personalisation towards customer targeting and help to establish future growth channels
to drive profitability. As the FCA prepares for this review, financial institutions can proactively seize the initiative and adopt a strategic approach to ICT to deliver the transformation needed.