High street banks will begin centralising their risk monitoring technology as financial crime rises and the recession puts pressure on IT budgets.
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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.