Banks are increasing their investment in
new technology and have made considerable changes to their IT
infrastructures – particularly with regards to data warehousing –
according to an Oracle-sponsored report, Management Information
Systems, 2011.
Around 43% of banks surveyed for the
report are planning to make significant changes to their IT systems
in the next four years to improve management information,
regulatory compliance and risk management. Of these, 21% are
planning immediate changes (within 12 months).
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Overall, over half (54%) will involve data
warehouses and slightly fewer (46%) Business Intelligence
applications. The plans were mostly for the short term (0-2
years)
The research findings also point towards a
trend of using third party banking technology rather than in-house
solutions, demonstrated by a 64% decrease in the use of such
systems today compared to 2008.
This trend is likely a result of
commercial off-the-shelf solutions offering the ability to overcome
the inflexibility of in-house core systems – which was the biggest
challenge reported in the study – as it often makes risk management
and regulatory compliance complex.
The survey did, however, show that banks
still make significant use of “end user applications” such as
spreadsheets.
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By GlobalDataDespite being a concern to banks,
regulators and auditors because of the potential for error, lack of
security and the difficulty of exercising control, only 13% of
respondents reported that they had prohibited the use of
spreadsheets.
The difficulty in avoiding their use was
recognised by a third of the remaining respondents who had a ‘use
when required’ policy
The surge in data warehousing combined
with the fact that 57% of banks have no plans to make significant
changes to IT systems in the next four years suggest that banks are
satisfied that they are already – or soon will be – able to
effectively manage risk and meet the new regulatory reporting
requirements, including the provision of information on liquidity,
large exposures and stress testing.
