An increase in the number of products offered in the world of financial services is taking its toll on firms who now need to offer and keep track of more products than ever before, according to a multinational computing firm.
The financial sector spends huge sums on IT. According to a report from research firm Financial Insights, global technology spending by capital markets firms alone will reach $95.5 billion this year. Increasingly, firms in the sector use their IT infrastructure as a core part of their services, integrating home banking, ATMs and trading systems into their products.
This is happening at the same time as a flurry of mergers and acquisitions, involving disparate sets of IT systems. According to a white paper on financial services IT from CA, "Some of the larger financial services industry players are still trying to get their arms around platform consolidation."
IT governance is one of CA's proposed solutions to IT problems in financial services. This is a process which attempts to integrate IT functions more closely with business functions. "The bridge that connects business and IT is the process of IT governance, which allows organisations to make fact based decisions in order to maximise the return on IT investments," said the white paper.
The Sarbanes-Oxley Act, a US law which can also apply to companies outside the US, has introduced a higher standard for corporate governance and accountability in IT. It introduced frequent auditing and reporting requirements and controls and data retention rules that impact on IT systems. As a result, IT directors carry a heavier burden: boardrooms expect them to take responsibility for the security, accuracy and reliability of the systems that manage and report their companies' financial data.
The other crucial element in CA's view of financial services IT is timeliness. The company offers a series of products aimed at increasing the amount of information sent to these businesses in real time.
"The value of static information is steadily diminishing," said the white paper. "When institutions are called on to make statements establishing their compliance with regulatory mandates, for example, they need to do so with complete confidence in the accuracy of the data they provide, and that demands real time information."
The firm believes that this kind of IT infrastructure can make the difference between success and failure in the competitive world of financial services. "In today's make or break financial services world," it said, "the spoils of victory go to those firms that have managed to tame their unruly IT systems through a coordinated approach to IT management and governance."