The UK will tomorrow hold its first General Election since the recession, writes Colin Rowland, senior VP EMEA operations at OpTier. With the economy still fragile, all parties have paid attention in their manifestos to the banking industry and changes to the current system. The industry has been in a constant state of flux for the last 18 months, and can expect more instability and further scrutiny as a result of the election. Any wide-scale change to a bank requires support across the organisation, but for IT it can be particularly challenging. With the three major parties putting forward different ideas for change, what challenge is heading over the horizon is still unknown.
The Liberal Democrats have been the most outspoken of the three parties. If elected, they have said they would like to see major reform to UK's banks. Party leader Nick Clegg said that he wants to see a change as fundamental as the Big Bang of the 1980s. One of the specific changes is an increased level of transparency by publishing the names of banking employees earning over a certain amount.
But the other parties are also talking about reform in the banking sector. The Labour Party manifesto plans to break up those banks in which the government has a controlling stake. Party leader Gordon Brown has also been keen to encourage the Financial Services Authority (FSA) to flex their muscle with Goldman Sachs, making it an election issue. The Tories would like to disband the FSA and pass over the responsibility of supervision to the Bank of England, potentially bringing about different compliancy regulation and reporting.
Regardless of who wins, at the heart of the issue is agility. Whatever new policies brought about by the May 6th election, banks will need to adapt and respond accordingly. But in the long term, banks want to also be masters of their own destinies. That doesn't mean being able to do whatever they want, it means putting themselves in a position where they are more flexible and adaptive to change. Ask anyone and they will tell you that compliance is a nightmare, industry initiatives play havoc with business process and bringing new offerings to market takes long than it should. The issue of agility is much wider than responding to increased regulation, it touches on - and in some instances restricts - everything banks do.
Traditionally banks have taken a very siloed approach to IT, with different departments implementing different systems. This has created barriers that make implementing change hard because there is no helicopter view of how IT is performing across the enterprise. Therefore the impact cannot be assessed and planned for. This often means that IT projects take on an unnecessary magnitude. What is required is a level of operational intelligence that helps financial service organisations to navigate and understand the impact of changes in order to ease the headache and better understand what needs to be done. To generate that insight they need end-to-end visibility of IT systems and business transactions across the company.
As the sector recovers, the industry hasn't seen the last of legislative pressure that seeks to prevent it from becoming too big to fail. But rather than a burden, perhaps it's actually an opportunity?