The investment banking division of Barclays Bank will use four software modules from UK-based Raft International to help it identify and manage the risks facing its business and introduce the necessary controls to meet international market regulations.
One of the modules will allow Barclays to analyse information stored on a central database for exceptional items, such as incorrect deals and regulatory fines. Another module will give the company an overview of the different risks faced by its business and grade their importance.
Philip Scott, director of operational risk at Barclays Capital, said the company wanted a best-practice product "that could take us beyond regulatory compliance", and added, "The Raft Radar provides us with an integrated product that can be deployed globally."
The deal has been driven by the need to comply with a raft of regulations, which will require a significant investment in IT systems by firms.
Georgina O'Toole, an analyst at Ovum Holway, said IT investment by financial firms to comply with regulations would bring wider benefits.
"Regulation projects such as Sarbanes-Oxley and Basel 2 have a dual effect. [In addition to helping firms comply with tighter regulations] they help to better integrate IT systems and enhance datacentres," O'Toole said.
Basel 2 has been described the biggest IT challenge for the banking industry since Y2K. Analyst firm Datamonitor predicted that IT spending on Basel 2 by European banks would peak at about £1bn in 2005.
Sarbanes-Oxley aims to create greater financial transparency.