Technology key to banks' compliance budgets

IT now accounts for as much as 50 per cent of compliancy spending in High Street banks, research shows.

Technology has established itself as an increasingly crucial component for businesses adhering to growing numbers of regulations and is set to keep rising, according to research from Enterprise Ireland, the Irish government's trade and technology board.

Judi Blackmur, senior advisor at Enterprise Ireland, says spending on technology for compliance in major banks is expected to rise by a further ten per cent next year.

'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,' she said.

Although the UK's major banks are mostly well prepared for new regulations like Basel II and the Companies Bill, smaller firms and especially building societies are less prepared.

As a result, analyst firm Gartner says spending on compliance will increase in the first half of next year, as companies look for ways to automate the processes they created in 2004.

'In the US, the first round of Sarbanes Oxley compliance is about to come to an end. In Europe, for many companies, it is just beginning,' said Debra Logan, vice president at Gartner Research.