The Nationwide building society has made its first move to adopt the forthcoming Basel 2 banking regulations by appointing a company to centralise and clean up its data.
The New Basel Capital Accord, a regulatory framework for the banking industry commonly known as Basel 2, is one of the biggest technology-related projects since Y2K.
IT challenges for banks include linking a maze of banking databases and reporting systems, updating older applications and ensuring data is accurate.
Basel 2 regulations have to be adopted by financial institutions by the end of 2006. Analyst firm Datamonitor has estimated that spending by European banks will peak at about £1bn in 2005.
Nationwide, the UK’s biggest building society, has appointed Detica to create a central store of historical transactional data store from all product lines by mid-2004. Detica is providing 25 data warehousing specialists to work with 10 Nationwide staff on the project.
The data store is being built using Nationwide’s existing SQL Server system and Detica’s proprietary systems to help collect data and change formats where necessary.
Bill Tonks, Nationwide divisional director of risk, said, “It is critical that the underlying data infrastructure is both robust and flexible enough to support change as the Basel 2 requirements evolve.”
The contract is believed to be worth millions of pounds, but neither Nationwide or Detica would confirm the exact price of the deal.
Daniel Mayo, lead analyst for financial services technology at Datamonitor, said, "Most large banks are doing most of the planning and implementation work themselves, and some are bringing in specialist firms.”
As a separate part of its Basel 2 project, Nationwide is developing a storage area network which, it said, will provide will provide back-up and disaster recovery facilities for 800 servers and 40Tbytes of data.