TowerGroup estimates that total IT investments on risk and compliance solutions will reach $51bn in 2004. Some 30% of these investments are wasteful, given the duplication of IT solutions over multiple functional silos and the inefficiencies of legacy technologies. A pervasive multiplier effect due to the manual procedures involved in exception processing, workarounds, reconcilements, and adjustments increases these inefficiencies and imposes a large burden on the business processes. Therefore, financial institutions are finding significant opportunities to save an estimated overhead of $71bn by investing wisely in data integration and enterprise technologies to improve their operational efficiency as well as cut down their operational losses.
Guillermo Kopp is vice-president of Financial Services Strategies & IT Investments at TowerGroup. E-mail: gkopp@towergroup.com
