67% of Britain's financial services organisations are not fully confident they are complying with legislation, according to new research commissioned by Dell.
The sheer amount of legislation to deal with was the main reason cited, followed by a lack of time and resource to deal with compliance issues.
But over a quarter of financial services organisations surveyed felt a lack of understanding was holding them back from complying with legislation - with nearly three quarters admitting they are not aware, or have a sketchy knowledge, of the Basel II Accord, which asks banks for instant access to between two and five years of historical data. In fact, only 13% of those financial services organisations surveyed felt they were fully aware of their compliance obligations and the penalties for not complying.
"With legislation such as the Basel II Accord coming into force in 2007, financial services companies would benefit from truly understanding their obligations," says Steve Lewis, Enterprise Systems Director, Dell UK. "Basel II will bring many benefits to banks - from improving their risk management systems and overall efficiency and resilience, to strengthening the stability of the financial market as a whole. However, non-compliance has serious penalties."
Cost of compliance and ROI
Financial services organisations are also counting the cost of compliance, with 63% saying their IT costs had increased as a result of having to comply, and over a third of those claiming it had affected other areas of spending.
"Despite this financial outlay, our survey also showed that nearly half of financial services organisations don't expect to see a return on investment from complying with legislation. By thinking strategically when making IT investments to meet legislation requirements - such as storage solutions - they could reap additional benefits from any new technology implementations," says Lewis.
"Operational efficiencies, such as the systematic archiving of financial data, email and other important records and reduced risk to business continuity, could be a real benefit. Dell partners with other industry leaders to promote awareness of compliance issues, and to offer customers a secure, low-cost and easy migration route to safeguarding important business information. Complying with legislation should be seen as an opportunity, not a threat," he concludes.