UK banks to increase compliance tech spending

UK banks to increase compliance tech spending

The UK's high street banks are spending up to 50% of their compliance budget on technology and expect this to go up by 10% over the next year, according to research commissioned by Enterprise Ireland.

But the survey of senior decision makers at 35 financial services firms found that investment banks and insurance companies are spending just 10% of compliance budgets on technology.

Training and education accounted for the majority of compliance budgets, but technology was earmarked as an important component and investment was likely to increase in the area.

Judi Blackmur, senior adviser at Enterprise Ireland, says: "The banking sector has traditionally been more driven by regulation, and as a result, most organisations already have centrally guided compliance strategies - their investment in appropriate technology is also clearly a key factor in this."

Although UK banks are coping with compliance, Blackmur says the sheer weight of regulation facing building societies - such as new mortgage regulations - means that many still lag behind banks in complying with mandates such as Basel II and Sarbanes Oxley.

Last year, HSBC's group chairman John Bond said the banking group spent $400 million a year just on compliance. In contrast, Blackmur says some building societies are only just beginning to develop a compliance model.

A recent Finextra survey revealed that more than a quarter of organisations in the financial services industry believe they are fully compliant, although 39% of respondents said their current IT infrastructure needs improving to support regulatory requirements, and nearly 60% said they are introducing new systems to help meet compliance obligations.

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