Regulatory compliance programmes currently take up 40% of
Barclays' IT investment spend, leaving little for product
development, the bank's group chief technology officer Kevin Lloyd
said last week.
Speaking at the annual conference of blue-chip user group The
Corporate IT Forum in London, Lloyd said that despite these
demands, Barclays' IT consolidation programme has cut operating
costs by £500m over the past five years.
"Regulatory controls take up a sizeable proportion of spend," he
said. "Basel 2 and Sarbanes-Oxley compliance is chewing up 40% of
investment spend."
An additional 20% of investment over the past three years has gone
on physical infrastructure renewal, which means money for
developing new products is at a premium, he added.
However, regulatory pressures have helped to encourage
centralisation of IT at Barclays. "The regulations mean that the
federated businesses struggle to become compliant at a competitive
cost, which encourages them to come to the centre," said
Lloyd.
Over the past five years, Lloyd has raised the proportion of
company-wide IT processing done centrally from 45% to 80%, and the
bank is currently running at 99.7% system availability.
Other factors in driving costs down at Barclays over the past five
years, he said, include using fewer suppliers, closer relationships
with suppliers and system integration partners, and the development
of defined standards and processes, which have helped with decision
making.
Efforts to get better value for money from existing resources have
paid off. Mid-range computing utilisation is up from 20% five years
ago to 45% today, with some way to go yet, Lloyd said.
Lessons from consolidation
Be clear about whether you are setting out to be a leader or a fast
follower
Make judgements and execute them quickly
Admit mistakes and rebuild
If it is not challenging and stimulating ask why you are
there
Adopt a balance of intuition and judgement as much as
research.
Source: Kevin Lloyd, group CTO, Barclays Bank