According to an IDC survey carried out in December 2003 on Western European banks, investment will focus on risk management, accounting, and reporting as a consequence of the major changes in accounting standards and the expected adoption of the new capital adequacy directive (Basel II).
“Vertical-specific solutions are constantly rated as top priorities overall in Europe, second only to security technologies,” says Raffaella Molignani, research analyst for IDC’s European IT Opportunity Financial Services program. “The combined analysis of priorities and current/expected investments highlight a common European interest in risk management and core banking solutions, even though there are still several specific country peculiarities in the investment plans.”
For example, German banks are focusing on core banking solutions in an attempt to reduce the cost/income ratio by leveraging on technology and by the need to change existing platforms to add flexibility.
Anti money-laundering is particularly important for UK banks, driven by the strong commitment of the Financial Services Authority to improve the control on money-laundering by fining banks that do not respect the existing regulations. In other European countries this issue is less pressing as banks are waiting for the complete adoption of the EU directive.
Operational risk management is becoming hot in France and the number of French banks wishing to invest in these applications is expected increase.
The survey, Western European IT Solutions and Vertical Specific Priorities, Banking, 2003 (IDC #PF14K, December 2003), presents the key results of IDC’s European Vertical Market Survey, carried out in December 2003 among 131 banks with more than 20 employees in the top 5 Western European countries (France, Germany, Italy, Spain, and the U.K.). IDC surveyed banking institutions, mainly at headquarters or major operating locations. The IS/IT director or manager, CIO, and VP of IS/IT are the qualifications most involved in IDC’s Vertical Market Survey, confirming that the majority of people covered in the survey are part of the IT department (around 70% overall in Europe).