Financial Insights forecasts 25 percent growth in spending on risk-data related products and regulatory initiatives.
Financial Insights is predicting a 25 percent growth in IT spending on risk-data related products and substantial investment to support regulatory initiatives.
The research and advisory firm makes these predictions in a series of reports detailing five-year forecasts on IT investments in risk data architecture, anti-money laundering systems, and credit-risk solutions.
Financial Insights says key regulatory initiatives will drive institutions to reevaluate their current processes and many need to upgrade systems. Credit-risk management requirements contained in the Basel capital accord are forcing many institutions to upgrade their credit processes and systems, says Financial Insights. The pressure will be most immediately felt in Europe, where the European Central Bank is pushing its capital adequacy directive regulations (CAD III).
Gene Kim, senior analyst in Financial Insights' Capital Markets Group, states in the release that firms cannot continue to ignore enterprise-level data integration issues. "Risk management processes require data from every part of a firm, nearly from every business process, and not explicitly determining how to promote greater data integration means that you are making decisions in the dark," states Kim in the release.