High street banks will begin centralising their risk monitoring
technology as financial crime rises and the recession puts pressure
on IT budgets.
According to a report from datamonitor, Using Technology to
Combat Financial Crime in Retail Banking, the risks faced by banks
are no longer limited to theft or money laundering, but include
other crimes such as data theft and financial misreporting.
Jaroslaw Knapik, financial services technology analyst at
Datamonitor, said the financial services industry turmoil will
increase crime levels. "Furthermore, cost-cutting pressures may
affect anti-money-laundering and anti-fraud departments, among
others. Indeed, some banks have already announced budget and staff
reductions."
Datamonitor surveyed 194 retail banks. A total of 64% said their
top investment priority is technology that provides effective
monitoring and detection capabilities and
accurate early warnings.
Ralph Silva, analyst at Towergroup, said the main challenge in
uniting the security, fraud and compliance departments will be
cultural clashes rather than the complexity of technology.
"In the past these were different departments with their own
responsibility and somebody has to give up power. But nobody will
be willing to do that."
"The suppliers have already thought about it and the products
are available. If the banks were putting these on a blank sheet it
would be easy," he said.